Investors are offered exposure to high-quality and exclusive Singapore residential property at a fraction of its value
Straits Trading Company has launched two new fractionalised property investment products for members of its shareholders' club.
The co-investment is offered via its FIR-STTM - Fractionalised Investment Real estate – Straits Trading, under Straits Trading's wholly-owned unit Straits Developments.
Straits Trading says the innovative investment products offer investors exposure to high-quality and exclusive Singapore residential property at a fraction of its value through preference shares.
According to Straits Trading, FIR-STTM offers advantages over other property-based asset classes because of easier accessibility to high value properties that otherwise have high barriers to entry.
FIR-STTM provides exposure to property investment without the hassles associated with property ownership as a Straits Trading unit will be responsible for the administrative work and maintenance of the properties.
Straits Trading has partnered with Dentons Rodyk & Davidson for legal advice, Deloitte Business Advisory for accounting advice, EY Corporate Advisors for tax advice, Cushman & Wakefield for business valuation and Knight Frank for property valuation.
“FIR-STTM is a unique investment product that offers diversification for investors who wish to gain exposure to Singapore residential real estate in bite-sized fractions," says Eric Teng, group chief operating officer and CEO of Straits Development.
"In line with our goal of asset securitisation under Straits 5.0, we are delighted to launch FIR-STTM, which seeks to engage and provide investment opportunities to our esteemed shareholders who have registered with the Straits Trading Shareholders’ Club," he adds.
Preference shareholders may receive dividends, which will be paid on a semi-annual basis.
During the investment period, the underlying properties continue to be owned by the existing owners while investors enjoy a share of the economic returns.
At the end of the expected investment period of 5 years, the preference shareholders may enjoy returns which reflect a share in the potential appreciation in value of the underlying property via a special payout.
The dividends and special payout are non-guaranteed and subject to the performance.
Shareholders can invest in two properties, whose value isn't disclosed.
The first is a condominium unit in Duchess Residences, a 999-year leasehold development located at 108 Duchess Avenue, Bukit Timah, with a minimum amount of $200,000.
The second underlying property is a freehold good class bungalow located at 8A Cable Road, Chatsworth Park, with a minimum investment of $500,000.
According to Straits Trading, both investments are offered to its shareholders’ club registrants only, which in turn, is open to shareholders who hold at least 100 shares of Straits Trading.
Besides offering co-investment opportunities, Straits Trading had previously organised for its shareholders' club members activities such as talks on ESG, tours and so on.
Straits Trading shares closed Sept 8 at $1.97, down 0.51%.