THE head of a United States investment firm with up to US$1 billion earmarked for Hong Kong property said prices would need to fall further before it started spending. Colony Capital chairman and chief executive Thomas Barrack said the required 'blood on the streets' was likely to be shed during the next year. Mr Barrack said: 'Hong Kong has been through a period of total denial, but in the next 12 months it will be time to look for investment.' The company, a private international investment firm, last month announced the formation of a Singapore-based joint venture with Oakwood International, a provider of up-market serviced flats in the United States, to manage serviced flats in Asia. Mr Barrack said the firm had appointed property consultants Richard Ellis to help seek joint-venture partners in other Asian markets. The company planned to invest about $2 billion in Asia within about two years, with about half of that targeted on Hong Kong. The company uses a range of business structures for developing its property portfolio across a number of real estate sectors. Investments include the acquisition or recapitalisation of companies with property assets such as hotels, resorts, retail projects and large scale office developments. The company has an estimated $100 million stake in the Amanresorts chain of Asian resorts. Mr Barrack said: 'Our strategy is to become an Asian investment company, by finding the best partners and investing in their business.' He said Colony Capital was looking for deals that provided an equity stake or the opportunity to recapitalise operating companies that relied on real-estate assets. 'It is Hong Kong where we are most likely to get these types of companies.' The company was also considering extending its portfolio to include mainland properties that had a link to Hong Kong. Mr Barrack said the company preferred markets such as Hong Kong and Singapore because they offered a sound physical and administrative infrastructure. 'There's a lot of interest in Asian property, but most people are on the sidelines because of fear that Asia is in a free-fall,' he said.