SEB to invest up to €300 million in Asia

KUALA LUMPUR: SEB Investment GmbH (SEB) is looking into investing between €150 million and €300 million (RM615 million and RM1.23 billion) per year in Asia over the next three to five years.

SEB managing director Choy-Soon Chua (pictured) told theedgeproperty.com on Monday, May 24 that SEB will focus on the retail and residential property sectors in Asia.

“There are two key reasons for this. As forecast by the World Bank, from now until 2028, Asia is expected to experience a net population growth while Europe will have negative growth and US, neutral. The population growth in Asia would drive up the demand for housing in Asia.

“Asians are also growing more affluent and they would be buying properties for investments as well as for own stay,” explained Choy-Soon

He added that consumer consumption in Asia tends to be higher than Europe and, as such, will steer the retail market.
SEB is the investment company for SEB Asset Management AG, a Northern European financial group with total assets worth €236 billion and €143 billion in assets under its management as of March 31, 2010.

Since 2006, SEB has invested about €1.6 billion in Asia through real estate funds with properties in Singapore, China, Japan, Australia and Malaysia, Choy-Soon said. Its flagship open-ended real estate fund, SEB Immolnvest has generated an annual return of 5.9% since its launch in 1989.

“We do not allocate a set investment amount for each market, it will be the returns that drive the allocation but we definitely will see more substantial investment in Asia in the next three to five years. We will focus on the key countries where we already have a presence,” added Choy-Soon.

On Malaysia, Choy-Soon finds the investment market fairly stable compared with markets such as Hong Kong and Singapore. The steps taken by the Malaysian government to liberalise the market also spells a positive future, he said.

SEB owns two properties in Malaysia – the RM485 million Pavilion Residences Tower 1 condominium project located in Kuala Lumpur city centre under the SEB ImmoPortfolio Target Return Fund and the RM280 million Citta Mall near Ara Damansara in Petaling Jaya under the SEB Asian Property SICAV-FIS Fund. SEB ImmoPortfolio Target Return Fund has generated an average performance of 7.7% per annum over the last years.

Citta Mall, with a nett lettable area of 424,467 sq ft, is scheduled for completion in 4Q2010 while Pavilion Residences Tower 1 (163 units), which was first launched in November 2009, is 70% sold. Pavilion Residences comprises two towers with Tower 2 being owned by Kuwait Finance House (205 units).

Choy-Soon disclosed that the final phase of Pavilion Residences Tower 1, offering 20 units of Sky Villas (4-bedroom apartments) and six units of Sky Palaces (duplex), will be launched at end-June. The units are priced from RM1,500 psf onwards with sizes that range from 3,300 to 4,200 sq ft.

While SEB is not looking at any specific property to add to its portfolio in Malaysia at present, the company is open to joint ventures with Malaysian companies for developments within and outside Malaysia.

“Joint ventures are good ways to access local expertise and since we have a strong presence in Europe, we welcome Malaysian companies that are interested to work with us to venture overseas,” said Choy-Soon.

Globally, SEB will continue to invest in key core markets in Europe and is actively looking at the US market as “there could be some good buying opportunities there this year”, said Choy-Soon.