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Luxury property fund eyes S'pore apartments

Monday 21 February 2011

SINGAPORE - Luxury property fund The Hideaways Club is here to look out for high-end apartments for its new timeshare property portfolio, called The Hideaways Club - City Collection.

Founder of The Hideaways Club, Mr Mike Balfour, was here just last week to review a range of Singapore luxury properties. Relying on his team of property hunters, he has his eye on a few choice high-end units here.

But it will unlikely be the pricey units at developments such as Ritz-Carlton Residences or the Orchard Residences, which have seen transactions at more than S$4,000 per sq ft recently. Instead, he is looking for high-end properties which offer value for money, rather than a luxury brand-name attached to it.

"If these homes have a brand-name to it, they usually command a premium. And we would like to maintain our profit margins," he said. Mr Balfour, who is also the founder of the Fitness First chain of gyms, said he plans to make Asia a key revenue generator for his City Collection's property portfolio.

He said 25 to 30 per cent of the City Collection's properties will be located in Asia. "Other major cities we are looking at are Kuala Lumpur and Hanoi," he added.

With the City Collection, he hopes to replicate the success of his first fund called The Hideaways Club Classic Collection. Launched in 2007, the Classic Collection comprises 50 villas in holiday destinations all over the world, with each 2,700-sq-ft villa costing an average of US$1.6 million (S$2.03 million).

It was started to offer investors another way to enjoy a luxury holiday, without owning an actual holiday home and doing away with the hassle of maintenance. The fund offers members an equity share in the property portfolio, which has a current membership of more than 200 members.

It is now the largest luxury timeshare club in Europe and Mr Balfour is targeting a maximum of 600 members and 100 properties for the fund in the next four years. For The City Collection, each member invests a lump sum of US$195,000 and pays an annual maintenance, taxes and concierge fees of US$18,500.

Each member gets about 12 to 23 nights of holiday stay a year in one of the fund's apartments. This would otherwise cost the member between US$1.2 million to US$3 million a year, said Mr Balfour. In addition to savings, the investor reaps 5 to 6 per cent of capital appreciation from the luxury apartment portfolio annually.

Mr Balfour said he is targeting 120 city apartments in the next three years for The City Collection. Each apartment is sized between 1,500 and 3,000 sq ft, and are typically two-bedroom and two-bathroom units in the city centre in major cities across the world.

Source: Today