Hong Kong-based private equity real estate firm Phoenix Property Investors is on the prowl for more investments in South-east Asia.

Currently it has invested about US$120 million – or 5 per cent of the US$2.5 billion it has raised since it was set up in 2002 – in Jakarta, Manila and Singapore.

The goal is to grow the region’s share to 15-20 per cent over time, if there are opportunities, said Samuel Chu, co-founder, managing partner and chief investment officer at Phoenix Property Investors, in an interview.

The group’s total assets managed and under management stands at over US$6.7 billion – in the luxury residential, retail and office sectors.

So far, all that Phoenix has bought in Singapore are three pairs of conservation shophouses at 48-56 Peck Seah Street for S$42.8 million in 2014. It has spent a further S$2 million sprucing up the asset, which is 82 per cent let. The property, with a total lettable area of about 20,000 sq ft, is generating around 3 per cent net yield.

Mr Chu said Phoenix is keen to make further investments in Singapore selectively, targeting the high-end residential and prime office assets here as he believes the bottom is near for these two segments and quality assets acquired at a reasonable price will do well when the market picks up in the medium term.

Brokers have been showing the group deals for potential bulk purchases in high-end Singapore residential projects.

“Obviously now the high-end residential and office markets are soft (but Singapore) is a financial hub. It is a regional hub for South-east Asia. The legal system is very good here, very transparent. The government knows what they are doing. I like the medium/long-term prospects for Singapore, but we have to find the right deal,” said Mr Chu.

Besides the high-end residential segment and offices, the group has also been looking at the retail property segment, Mr Chu added.

For now, Phoenix is more keen on investing in existing completed properties in Singapore, doing asset enhancement works and repositioning them if necessary – rather than to embark on a new development, given prevailing bullish land prices.

The US$120 million equity that Phoenix has invested so far in South-east Asia was allocated from the US$750 million Fund V; so far close to US$500 million of Fund V has been invested.

Further investment in South-east Asia will come from the uninvested equity from this fund as well as co-investments from existing investors outside the fund structure. “It is never a lack of capital. It is lack of finding the deals,” said Mr Chu.

Phoenix’s investor profiles include pension funds from Europe and America, sovereign wealth funds, insurance companies, endowment funds from universities (such as the University of Michigan), foundations and big family offices.

The World Bank Pension Funds and the US-based The Church Pension Fund are among the names Mr Chu cited.

Adapted from: The Business Times, 6 December 2016

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