Tycoons’ property fund optimistic about London, US markets
Tycoons' private equity fund snaps up prime investments outside China, the latest being the 237-room Marriott London Grosvenor Square Hotel
Properties in London and the United States offer the best investment potential, advisers at Joint Treasure International said.
The private equity fund - formerly known as Polylinks International and formed by a group of wealthy Hong Kong, Singapore and Malaysian businessmen - has invested in the global property market for 22 years.
The fund has seven partners: Chow Tai Fook Group, the Wee family of Singapore's United Overseas Bank, Lee Seng Huang of Malaysian-listed Mulpha International, Tom Chan from the founding family of Crocodile Garments, Arthur Liang from the family who were once major shareholders of The Hongkong and Shanghai Hotels, David Chiu of Far East Consortium International and New World Strategic Investment.
But only four of the partners - Chow Tai Fook, Mulpha, Chan and Liang - were involved in the acquisition of the 237-room Marriott London Grosvenor Square Hotel last month.
"It is our unique business model and the key to our success. Our members can choose to be involved in different property purchases, depending on their preferences," said Daniel Yiu, senior adviser at Joint Treasure.
The group's members invest in various kinds of property, particularly distressed property. As they are looking to diversify their portfolios, the fund limits its investments to major gateway cities outside Hong Kong and the mainland.
"We are looking for investment opportunities all around the world. But we would only invest in the best cities in the best countries," Yiu said.
"The best cities have a stable social, economic and political environment. If any one of the factors is missing, the property market won't be good."
The fund owns five properties in London, Beverly Hills and Tokyo worth a total of about US$1 billion.
"We are particularly optimistic about London's property market," Yiu said.
Although the prices of properties in prime locations in London and New York have surged over the last few years, surpassing the levels before the global financial crisis, Joint Treasure senior adviser Beatrice Cheung Wen said: "London is attracting many global investors. We believe prices will continue to go up, as the supply of the properties is limited and investment demand, particularly from Asian investors, is very strong."
The fund acquired the hotel in London for £125.15 million (HK$1.64 billion) for its prime location and the favourable outlook for tourism.
"It is a newly renovated hotel. The average room rate is £300 per night. It offers a yield of 6.7 per cent," Yiu said.
The fund is now seeking a buyer for an office building at 10 Stratton Street in London at an asking price of over £80 million.
Yiu is also optimistic about the US market, as the country's economy is improving.
"However, since the economic recovery has relied on QE I, II and III, it is uncertain whether [the quantitative easing will have] side effects," he said.