KEY DEVELOPMENTS IN 2015
Besides its existing investments in the retail mall in Chongqing,
China and the ARA Summit Development Fund I, Straits
Real Estate successfully committed to a number of new
investments in 2015. These investments cover a wide variety
of strategies and markets ranging from a Malaysian core-plus
retail strategy to a Japanese special-situation program.
DIRECT REAL ESTATE INVESTMENTS
Chongqing Retail Mall Project
The construction of the retail mall in Chongqing was
completed by the vendor developer according to schedule.
Straits Real Estate took possession of the bare-shell building in
September 2015 and swiftly commenced interior renovation
of the property. RSP Architects Planners & Engineers, the
interior designer, has portrayed the mall as playful, green and
captivating to the senses, to break away from the mundanity
of shopping mall designs in Chongqing. The mall environment
is sensitively planned and crafted to complement the excellent
location of the mall, providing Chongqing residents with an
alluring alternative to the crowd and fuss of more established
retail hubs in the city.
To be named
Ἆໄ
My Place, the mall not only caters to
middle-income residents of Nan’an District, where it is
located; but also shoppers from neighbouring districts in
Chongqing.
Ἆໄ
My Place will benefit from its direct access to
the Chayuan subway station, which serves the 28-station
Line 6 of Chongqing’s extensive subway system.
The mall is expected to be operational by the latter half of 2016.
YEAR IN REVIEW
REAL ESTATE
OVERVIEW
Straits Real Estate Pte. Ltd. (“Straits Real Estate”) is the 89.5%-
owned real estate investment vehicle of The Straits Trading
Company Limited (“Straits Trading”). Straits Real Estate is
set up as a financial investor to seek out real estate-related
opportunities across the Asia Pacific region and beyond.
Straits Real Estate operates on a business model that is akin
to a real estate private equity fund that identifies attractive
markets and sectors for investment and then focuses
on allocating and deploying capital into them. This is a
process that combines both a top-down and bottom-up
approach to analysis and leverages off the extensive business
networks of Straits Real Estate, Straits Trading and ARA Asset
Management. In the majority of cases, Straits Real Estate will
seek to work with local partners to leverage off their ground
knowledge and expertise. Such partners may for example, be
a real estate developer, real estate operator, real estate fund
manager, or an asset manager, taking into consideration the
specifics of the transaction and the optimal arrangement for
Straits Real Estate’s participation.
Straits Real Estate monitors the market closely for exit options
for its investments, while managing its assets actively to
optimise their values and thus returns to shareholders.
It emphasises capital efficiency in its investment and
divestment decisions to find the best balance for its capital
flow, use of gearing, and design of its capital structure.
Because it adopts different strategies with regard to different
markets and sectors, Straits Real Estate is exposed to different
types of risk with its different investments. The successful
implementation of Straits Real Estate’s business model
requires a clear understanding of a wide array of risks, the
experience to price these risks, and the ability to manage
them. This capability to take on and manage these risks is
ultimately expected to translate into the higher returns that
Straits Real Estate is set up to deliver.
Straits Real Estate in general, is total-return focused.
Portfolio-wise, it seeks to find a balance between income
return and capital appreciation. An investment that lies within
the core-plus risk space may bring a higher proportion of
upfront income to the portfolio while the expected returns
of an investment in a development project would tend to be
back-loaded in the form of development profit. Straits Real
Estate’s ability to invest across markets and sectors, and its
understanding of risk give it the tools to shape and manage
the portfolio returns effectively.
Ἆໄ
My Place retail mall, Chongqing, China
STRAITS REAL ESTATE PTE. LTD.
(“STRAITS REAL ESTATE”)
22
THE STRAITS TRADING COMPANY LIMITED
