Singapore and Hong Kong investors expect portfolio value to rise

Singapore and Hong Kong investors expect portfolio value to rise

Dec 4, 2009 - PropertyGuru.com.sg

Based on a survey done by Barclays Wealth on high net worth individuals, Singapore and Hong Kong investors are very much interested in properties. In fact, HK investors have apportioned 25 percent of their portfolios to property.

Both groups are expecting to allocate a larger portion of their portfolios to property by around 3 percentage points for the next two years.

They cited that capital appreciation and potential yield are two primary advantages of investing in residential properties.

According to Barclays Wealth, it expects that the demand of investors for property will remain relatively strong due to the loosening of liquidity and economic recovery. However, it noted that diversification is vital to any investment portfolio.

“At the end of the day, 25 per cent concentration for a Singaporean respondent is a fairly high part of the portfolio to invest in one asset class – one which, depending on the specific instance, could be potentially illiquid. That's a higher number than what we would be recommending,” said Manpreet Gill, Asia strategist, Barclays Wealth.

“At this point in time, we think it makes sense to invest in risky assets, which will include property, but also other asset classes like equities. We think diversification is a very important part of what clients and investors should be looking at today. That's one of the important findings of our survey.”

Barclays also noted that property does not usually deliver high long-standing returns as an asset class.

In Singapore, Barclays anticipates rising price trends in the mid- to higher-end segments of the market, where prices of properties have taken a hit due to the global credit crunch.

Barclays conducted the survey in August and September. It polled more than 2,000 respondents from across the world, including India, Spain, the US and the UK.