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Issue No. 2013/4 - August 2013

RunningStream International Pte Ltd

tributaries

A B I - M O N T H LY N E W S L E T T E R F O R C O

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Cover Story : Starting a property portfolio... Pg 2

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Knowledge Base : Help to buy scheme to push up London prices... Pg 2 M

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Area Insight : The history and future of Liverpool... Pg 4 E

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Starting a property portfolio... So you have heard us pitch the idea of building a Property Portfolio as the key to your financial aspirations, why we think property is and can be a sure way to financial success. But how do you get started? While the topic would warrant a complete book, here’s a but of a teaser to get you thinking...

well, that tends to be where many of you will stop reading. But hear me out. In our experience, it’s often not about having no capital, but knowing where they are and how to extract them in the right way. Many have what we term “passive capital” which resides in assets that we have; but have no idea how to extract it nor the risk implications.

Plan. No, money is not the no. 1 issue as you might think. Plan is. A plan, simply put, is a strategy to get you from point A to point B. Point A being where you are; and point B being where you will like to be in time to come. Of course the devil is always in the details.

In some ways we all hoard in fear of losing wat we have, often only to lose more finally. Don’t get me wrong, it doesn’t mean that you should put all your monies into the next “too good to be true” deal. But I have never known wealth to grow and multiply when buried.

“Point A” simply means your present profile, assets, liabilities, income, knowledge, experience etc. “Point B” reflects the lifestyle and financial state that you would like to have. And the plan is your strategy of getting there.

As we like to tell our investors, if you don’t have, find. If you can’t find, share. If you can’t share, save. There’s always a way, when there is a will.

As a guru once told me, success is guaranteed by plans, and occasionally patronizes hope. So have you got your points clearly laid out? Tacking action without goals is putting your success in the hands of luck at best.

Wisdom. Despite tremendous economic progress, the general level of financial intelligence in Singapore remains relatively low. Yes, there are indeed many with great financial minds but the gap between them and the general public is significantly wide.

Capital. Investment is about putting money to work and without money in the first place...

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I strongly suspect that it has got to do with the way that we have been educated but that’s quite another topic for another day. Notice I used the word wisdom. We all start with knowledge that should translate into intelligent interpretations to drive wise decisions. But most stop short of decisions. Courage. Knowledge and decision has to translate into action. Actions create experience that feeds into the cycle once more making one a better investor. We all have friends who talks about the risks of investing without having investing. It is not unlike those who talks about parenting while never having a kid themselves. Remember. Courage makes plan. Fear makes excuses. Courage sees opportunities. Fear see risks. Courage takes action. Fear procrastinates. Conclusion. So is that all to it? Well, not really but if you got those 4 nailed down I would say that’s a pretty good head-start. Building a property portfolio is certainly no mean feat. But we believe that everyone can do it. And we are here to help. And you decided that its time to do it, we are just an email away.

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portfolio@runningstream.com Ok. Now you got the email address and you are about to write to us. But what comes after that? Now at RunningStream we are all about property portfolios. We have over the years developed a 4 steps process (see diagram on left) accompanied by sophisticated tools and reports to help you analyze your position, set goals and come up with strategies to get there. So yes; send the email. Remember fear procrastinates. Courage takes action. And for a limited time till end of this year, the initial sessions are totally free. So you have absolutely nothing to lose. Issue No. 2013/4 - August 2013

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EDITOR’s NOTE Greetings from us all at RunningStream! The good news is; we survived the second issue! And we definitely look forward to the 10th and the 100th issue continually improving and serving you! It has been a busy couple of months with new projects and continual refinement of our business. In Australia, we are about to launch our next South Brisbane project which promises to be an absolute stunner. And our upcoming township development in the heart of the Southeast Queensland growth zone is heating up, getting all ready to serve in the months ahead. Already we have completed fund raising for the first plot of land and planning has commenced. Recently Dan made a trip to the UK and as usual, came back with lots of exciting developments. He took lots of photos around Railway House, which has a location second to none. He also secured a waterside project along the wharfs of Liverpool at prices undervalued by over 20%. Plus hotel opportunities in London and Europe which we are keeping under wraps until things firm up further. It is an exciting time for us indeed. If you have not started investment yet, or if you already has got a portfolio going, you might want to seriously consider talking to our Portfolio team soon. Many of our clients have attested to our service level and creativity in helping them get started. Whether it be capital sourcing, portfolio rebalancing or starting from scratch. Our consultants are well trained to help you figure out the nuts and bolts. Reading our cover story in this issue would be a great start. All that and we are expanding our team as well. Plus putting together an investor training program for aspiring investors looking to start the ball rolling. The truth is, we are probably overloaded. But hey, who’s not overloaded in their work right. As long as we are having fun and you are benefiting, we can’t ask for more. Enjoy the issue and we look forward to seeing your around soon.

Help to Buy Scheme set to Push Up London Property Price On 20 March 2013, the UK Government announced the introduction of a new scheme, Help to Buy, to assist British Nationals or residents who want to get on, or move up, the property ladder. Since the Global Financial Crisis (GFC), UK banks have generally been unwilling to extend lending to buyers with small deposits.  While buyers with larger deposits of between 25% to 40% have been able to access relatively cheap, and a wide range of loan products, those with 5% deposits have had to contend with largely expensive products.  For example, a typical three-year fixed rate mortgage for a person with a 25% deposit costs around 2.5%, while a buyer with a 5% deposit could pay a rate of just over 6%.  With the average price of a property in London now higher than at the 2007 peak, it has become increasingly difficult for the average Londoner to save a sufficient deposit to purchase a property at an affordable interest rate. What is Help to Buy? While full details of the scheme have yet to be made known, it has been announced that the Help to Buy scheme will be limited to properties with a value of up to £600,000, and will consist of two parts. The first is a loan up to 20% for purchasing new build homes, with £3.5bn in funding available from 1 April 2013.  A buyer with a 5% deposit will be able to borrow 20% of the purchase price from the Government, interest-free for five years.  The loan, plus charges, is repaid when the property is sold or at the end of the mortgage term.  If the property is sold, borrowers repay the Government by giving them back 20% of the sale price of their home. The other is a mortgage guarantee for purchasing existing homes, available from January 2014. The government will make available £12bn of guarantees to lenders who offer mortgages to people with a deposit of between 5% and 20%.  The Government has said this amount should be sufficient to support £130bn of high loan-to-value mortgages, thereby increasing the availability of mortgages on existing properties for those with small deposits. UK property prices set to increase

Yours truly, The team@RunningStream

Issue No. 2013/4 - August 2013

While prices in London have remained strong post-GFC, it is our view that price increases will be even more robust in London over the next several years as a result of this Government stimulation.

The scheme is being introduced to help those with small deposits onto the property ladder. Unlike previous housing assistance schemes, there is no limit on how much the buyer earns, which opens up funding to many more people.  We believe the scheme will significantly push up demand, but only marginally increase supply. JP Morgan has estimated that there are 1m firsttime buyers who have been unable to buy since the GFC because of constrained mortgage market conditions.  The broker has told clients. “Of those if even half find funding and attempt to buy over the next three years, we would see a 27% increase in housing demand.” While the Government is attempting to tackle the problem of “generation rent”, those who are effectively locked out of the property market, at the heart of the issue is supply.  There is limited housing stock in London which keeps prices strong, even in economic downturns.  The lack of stock in London is not that housebuilders are unwilling to build; rather constraints are largely due to the UK’s strict planning laws and, to a lesser degree, the number of available sites on which to build in London.  JP Morgan forecasts London house price inflation accelerating from the current 10% level, in 2015 and 2016. As with any asset purchase, there is a first-mover advantage to be had; the earlier one makes a purchase from when the Help to Buy scheme is launched, the better one will be placed to take advantage of price rises.  We are aware of some developers who have recently pulled unsold developments off the market.   They are, presumably, waiting for clarity on, and implementation of, the Help to Buy scheme to reprice some of these developments upwards.  Our view is that further upward re-pricing will take place as more people start accessing the scheme for funding. While the cap on financial assistance by the Government is £600,000, we believe that prices above the cap will be pushed up by the increased demand at the £600,000 and below mark.  Expectation often becomes reality, and if housebuilders and house owners expect that property prices will rise, property prices at the sub-£600,000 level will soon start rising, putting upward pressure on property prices further up the chain. Claudine Ang Regional Market Director (UK & Europe)

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important opportunities to— high value assets.

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ridgelines and gullies; and

improvement measures and habitat enhancement.

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The result will be an enhanced total water cycle management strategy and environment.

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operated recreational facilities and other community facilities.

and Gully.

their environmental values, particularly as wildlife habitats and

from developers who are proceeding rather than waiting for o areas to develop, but may also necessitate further detailed investigation regarding ‘any competing’ sites. for comparison purposes to assist with further planning and interpretation.

CONCEPT VISION GREEN CORRIDORS

Thagoona Township Redevelopment Plan

The only project in and around KL for only RM500+psf that comes with huge upside.

A brand new township in one of the fastest growing zone of Australia.

An unique low entry product with a 10 years 8% rental guarantee by yours truly.

Royal Regent is a project that stands to benefit from the upcoming mega project KL Metropolis. New projects nearby already selling for over RM1,000psf.

Thagoona Township Development is a project by LDA - an Australian developer with a slant towards building highly sustainable community.

Railway House consist of 29 units of micro apartments designed for student and short term accommodation right in the heart of Liverpool’s commercial district.

And not only that, it comes partially furnished and completes in less than 6 months from now. Limited units are available now but at that price we deem it to continue to be a great investment.

This is a project that we have taken a deep interest and participation in, having our CEO, Mr Dan Toh siting on the board of directors of the development company as well.

The Railway House is an unique opportunity for investors looking for long term stable yield in the UK short term and student accommodation market - the highest performing asset class in UK.

Conceptualized as a 21st century commercial business district, KL Metropolis is poised to become one of the nation’s most important city. Designed to meet Malaysia’s GBI Township requirements and a registered LEED for Neighborhood Development Masterplan (by world renowned firm Skidmore, Ownings & Merrill LLP ) with principles of smart growth, green building and sustainable community, KL Metropolis will set the benchmark for future sustainable developments in the region.

The project is right in the heart of Liverpool’s commercial district along Tithebarn St. and with that location the demand for rental will undoubtedly be high. Hence RunningStream is taking on the entire project ourselves and upon buying, we will lease back the unit from you for a period of 10 years at 8% of the price yearly. This means that we will be your tenant with the right to sublet essentially.

We are providing marketing assistance to LDA to structure and raise funds for the development that provides a profiting sharing model of returns up to 18% pa. over the next 7 years, totally secured by the land prices itself. All legals will be Singapore based and numbers transparent to each investor.

DEVELOPER

DEVELOPER

MayLand Developments Pte Ltd

Land Development Australia

PRICE RANGE

PRICE RANGE

From RM1m+

A$52,500 per share.

CASH OUTLAY

CASH OUTLAY

From SGD25,000.

From A$52,500.

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DRAFT FOR DISCUSSION

The goal is simple - building a 3,000 homes sustainable community together with renowned partners such as Tract and Sedgeman Yeats on a landscape that us just about as perfect as one can find in terms of natural terrain and resources in one of the fastest growing region of Australia. Of course the city council is behind us 100% of the way as well.

The potential of what it can become rest largely on KL Metropolis - a RM15b project over a 15 years period till 2025 with phase 1 already awarded to Lendlease and Daewoo.

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Such an arrangement will remove the headaches of liaising with oversea parties and provide greater comfort and security. The project is approved for letting to both students and general short term leases.

DEVELOPER

RunningStream International Pte Ltd PRICE RANGE

GBP50,000 - GBP58,000 CASH OUTLAY

From GBP50,000

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Corporate & Trust Structures for Real Estate Investing Undeniably, real estate portfolios form a significant part of the total wealth of many Singaporeans. With the impact of the ABSD (Additional Buyers’ Stamp Duties) and the TDSR (Total Debt Servicing Ratio), ownership of real estate by clients and inheritance planning becomes much more complex, especially if the interest extends beyond Singapore shores. How should real estate be acquired and held? What are the planning considerations and issues? Investors may not realize potential traps they could get into with estate and Issue No. 2013/4 - August 2013

inheritance taxes in places like the U.K. and the U.S. We will be discussing such issues and highlight the corporate and trust structures to hold real estate portfolios as part of wealth succession. See how a hybrid trust and insurance structure that can be a powerful technique to perpetuate the wealth of the family for the long term. Date/Time : 05 Sep 2013/6:30pm - 9pm. Location : 79 Tras Street, S(079018) - Cafe @ The Showroom Registration : register@runningstream.com Speaker : Mr Lee Chiwi (CEO, Rockwills Group) Page 3

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Employment Liverpool’s growth of 9.9% between 1998 to 2011 exceeds GB’s 7.8% Liverpool’s GVA grew by £68m (0.7%) to reach £9,146m in 2011.

Strong Long Term GVA Liverpool’s GVA has grown by 77.6%, which is slightly below the UK (78.9%) but greater than the Core Cities (71.4%) and city region (62.8%) averages from 1997-2011.

Economic Sectors Health is Liverpool’s largest sector accounting for nearly 20% of all jobs, followed by Retail (11%), Education (10.3%), Public Administration & Defence (9%).

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LIVERPOOL

second city of the empire and world’s first global city.

GVA £9,146m

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“We want to see innovation and a market-led approach in build development and quality, to ensure the people of this city get the housing they deserve.” Mayor Joe Anderson on delivering additional 5,000 homes by 2016.

Liverpool Economic Briefing 2013

monitorthe of jobs, business and economic growth which includes Liverpool is a city and metropolitan boroughAof name of “Mersey Waters” Merseyside, England, United Kingdom along the Peel’s flagship projects Wirral Waters and eastern side of Mersey Estuary. It was founded as a Liverpool Waters. borough in 1207 and was granted a city status in There are many specific and exclusive benefits 1880. In 2011 the population was 574,500 and is at the centre of a wider urban area, the Liverpool City Region.

Liverpool is noted for its rich architectural heritage and is home to many buildings regarded as amongst the greatest examples of their respective styles in the world. Several areas of the city centre were granted World Heritage Site status by UNESCO in 2004.

deriving from this, some of which are:

As a major British port, the docks in Liverpool have historically been central to the city's development. The best well known dock in Liverpool is the Albert Dock, constructed in 1846, today comprises the larges single collection of Grade 1 listed buildings anywhere in Britain. One of the major developments in the Liverpool region is called Liverpool Waters. The Liverpool Waters vision involves regenerating a 60 hectare historic dockland site to create a world-class, highquality, mixed use waterfront quarter in central Liverpool. The scheme will create a unique sense of place, taking advantage of the sites’ cultural heritage and integrating it with exciting and sustainable new development. Liverpool Waters will contribute substantially to the growth and development of the city It will accommodate new and existing residents, attract national and international businesses and encourage a significant increase in the number of visitors to the city, adding to Liverpool’s cultural offer and providing a new and complementary destination. In March 2011, the UK Government established 4 areas within the United Kingdom to give their special support to and called them “Enterprise Zones”. One of these Enterprise Zones was given A

In RunningStream, we believe in leveraging real estate assets in places with social, economic and political stability to grow the wealth of our clients. We are highly investment centric, engaging ourselves in rigorous research and structuring creative financial strategies to help our clients build a real estate portfolio that can withstand market cycles thereby creating sustainable wealth. Tributaries is our monthly publication to help our clients stay informed about the property markets around the world. We Issue No. 2013/4 - August 2013

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• Potentially 100% business rates discount for five years. • A simplified and improved planning regime replaces the old legislation which means more flexibility in terms of changes of use of floor space. • Provision of super fast broadband in addition to the £13 million investment by Wirral Government to improve existing Broadband facility. The iconic tower that will be erected in conjunction with the Liverpool Waters development has been named Shanghai Tower and is currently approved for construction. Standing at 200m tall it reflects the strong and long-standing relationship between the city and China. Liverpool is also one of the major university cities in the UK. Students are a huge boost to the city's economy. Millions of pounds are poured into cafes, restaurants, bars, pubs, clubs and shops in university cities every year. Many of the businesses are also staffed by students. With the majority being under 21 and willing to work long shifts for the lower level of minimum wage, business owners can save nearly 1 pound per hour in wages by employing students. Michael Chan Market Analyst, RunningStream

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welcome you to provide a copy of this to anyone who might be interested.We certainly welcome any feedback and suggestions that you might have. Simply send us your thoughts via email to marketing@runningstream.com. If you are interested in any of the events or projects listed, email with your details to register@runningstream.com. Please note that we only reply to emails with at least your name and mobile no included and we will also add you to our mailing list.

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Issue no 2013:4 aug 2013