Foreign investors cash in on robust market

PUBLISHED : Wednesday, 17 November, 2004, 12:00am
UPDATED : Wednesday, 17 November, 2004, 12:00am

THE BULLISH MARKET sentiment provides an excellent opportunity for some foreign funds and investors to sell and realise the investments they acquired a few years ago.

Australian fund Ochtar Capital Partners has released the newly renovated apartments at 56 Repulse Bay, while GRA is selling houses at three projects in Island South.

CapitaLand, the region's biggest developer, has put the luxury apartments at Tower 15 in Hong Kong Parkview, Tai Tam, on the market. It bought the tower as an investment five years ago.

Landscope Realty managing director Koh Keng-shing said foreign funds usually moved to sell and realise their investments after holding a property for a period of time.

'Funds often set out a policy to liquidate their investments within a specific timeframe, say three to five years,' he said.

Most of the funds selling luxury assets recently had bought the properties several years ago, he said.

Despite this selling mood, Mr Koh said some other overseas funds which had not held Hong Kong properties before remained keen to enter the market.

'There are more foreign investors looking for suitable properties on the market now than a year earlier,' he said.

'They are interested in Hong Kong's assets despite the price increases. The market prospect looks positive with more certainty, which bolsters investing confidence.'

Mr Koh said it was normal to see people liquidating their properties and people buying into the market.

With the sharp price growth in the past year, some of the investors selling now are making good profits.

Lend Lease bought 56 Repulse Bay, formerly known as Royal Cliff, from Sino Group in 2001 for $1.58 billion. Ochtar Capital Partners later led a management buyout of Lend Lease.

The project has 53 apartments with sizes ranging from 2,671 sq ft to 4,375 sq ft.

All units feature floor-to-ceiling windows to enable residents to enjoy the enchanting views of Repulse Bay.

According to Jones Lang LaSalle, sales agent of 56 Repulse Bay, 12 houses were sold soon after its recent initial launch, fetching about $850 million.

GRA is putting on offer the houses of Carmelia in Stanley, No12 to 16 Tai Tam Road and No1 to 9 East Shouson Hill Road.

The fund bought Carmelia for $175 million and the Tai Tam Road project for $398 million in 1999. It also paid $780 million for the East Shouson Hill Road development that year.

CapitaLand acquired the 42 apartments of Tower 15 in Hong Kong Parkview for $962 million, also in 1999.

Simon Lo, director of research and consultancy with Colliers International, said there was no cause for concern about the recent selling spree by foreign funds.

'It is not a wave of selling out by foreign funds. It happens to be the time some of them are trying to realise their gains and investments they acquired a few years ago,' he said.

'Funds often have a five-year lifecycle holding a property for investment. Their sales strategy is not confined just to the consideration on the market outlook.'

Mr Lo said many European funds were now searching for suitable properties in Hong Kong.

With the strong rally of the Euro against Asian and Hong Kong currencies, the region's property assets still looked attractive to these investors, he said.