What are the institutional-grade real estate investments?

Real estate is an exciting and dynamic class of investment. It touches on a broad spectrum of sectors. It can be an investment into a property development project (e.g. a sustainable eco-resort somewhere in South East Asia or a smart village for senior retirees), an equity stake in a shopping mall brand or 7-star residential building. The investment managers would have different investment mandates to build up a portfolio of properties (e.g. residential, commercial, industrial and hospitality) to create sustainable returns of investments.

Given the large size of the assets and volume required for investments, they tend to be exclusively for the institutional players (like private equity, funds and banks). The investments can be by way of loans, in equity or a combination of both. As the financing relates to tangible assets, the investment risks would be mitigated by taking security over these assets and other factors (e.g. asset management strategy). 

Before making an investment of this type (whether loans or equity), the institutional investors would engage and dedicate specific resources to conduct due diligence, research and risk analysis to determine the feasibility and investment thesis. Once the investment is made, a dedicated group of stakeholders will ensure that the investment is strategically monitored and managed to create sustainable value for the property as well as for the investors. 

As these investments carry risks, they typically have been exclusive and accessible only to institutional players with a high entry ticket price (e.g. US$100million). To ensure returns on these  investments commensurate with the risks, the underlying assets have to be managed by prominent and reputable real estate investment managers. 

In unlocking a new way to invest for our retail investors and accredited investors, Minterest has teamed up with likes of ARA Asset Management and Straits Real Estate to cherry pick investments for our Members to “co-invest” with these players. 

To know more about ARA Asset Management, click here and about Straits Real Estate, click here.

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