More super-wealthy South-east Asian individuals, including Singaporeans, are looking to invest in UK properties, especially in London.

More super-wealthy South-east Asian individuals, including Singaporeans, are looking to invest in UK properties, especially in London. But the flows are not just going one way; more British investors too have become interested in Singapore real estate, say two senior private bankers with SG Private Banking, part of the Societe Generale Group.

‘Over the past one year we have seen - if you consider only the more serious expressions of interest from our clients in South-east Asia in this market (UK) - a jump of at least 20 per cent,’ said Don Percival, director of private banking with SG Hambros, which is SG Private Banking’s UK arm.

The property boom in this part of the world has heightened the interest that wealthy Asians have traditionally had in acquiring real estate as an asset class, and the UK is one of the most popular destinations for that purpose, Mr Percival told BT.

The UK property market holds several attractions for foreign investors. Not only does it offer investors non-domicile tax status, it also offers a stable economic and political environment. Furthermore, the market has been booming as growing demand exceeds limited supply, with property values in central London growing some 33 per cent last year.

There’s also a historical connection for investors from South-east Asia, as a result of British colonialism.

Said Nikita Rossinsky, managing director (Southeast Asia) of SG Private Banking: ‘There is an amazing amount of interest right now (in UK property). And part of it is historically motivated. There’s an affinity with the UK especially in this part of the world. Investors from Singapore, Malaysia, Brunei - when they look overseas, they look at the UK.’

Typically, these high-net-worth clients are looking to diversify their portfolio by investing in the UK. Many of them, in fact, may already have an exposure to the UK property market, but are looking to rebalance their portfolio.

Said Mr Percival: ‘We’ve seen more Singapore clients who already have portfolios in London.’

Added Mr Rossinsky: ‘And it’s not just money going from Singapore to London. We have also seen clients who have multiple properties there, who then leverage these properties to help them invest in their business here. So the money goes out and then comes back here.’

The Singapore real estate market itself has also become a draw for foreign investors, such as those from the UK, who are drawn by recent developments here and the stable regulatory and social environment. ‘People feel comfortable investing here; it’s a centre of global excellence,’ said Mr Rossinsky.

‘And we have seen the interest in London as well…Singapore is marketing itself as ‘the Switzerland of Asia’ and I have made introductions to our teams here for accounts and trusts to be set up,’ said Mr Percival.

The two senior bankers were speaking to BT after a private seminar held by SG Private Banking for about 50 of its South-east Asian clients last week. The seminar was held in response to more queries from clients on investing in UK property. It drew double the number of participants it had planned for. About 60-70 per cent of the guests were flown in from Malaysia, Brunei, Indonesia and the Philippines.

A lot of times, a client’s property investment decisions are also influenced by lifestyle factors, as the investor may also be looking to stay in the property he buys, said Mr Percival.

What his bank then does for these clients - upon introduction by their local SG Private Banking relationship managers in Asia - is to adopt a holistic approach in helping them make the best property investment decisions.

Other than offering lending services, the bank also provides advice in efficient tax planning, and estate and success planning. It also introduces them to independent specialists in property acquisition, education and immigration, said Mr Percival.

Source: The Business Times, 16 July 2007