Banks target newly wealthy Asian buyers with short-term loans

New York /
Nov.November 12, 2012 02:00 PM

As Asia’s newly wealthy are increasingly interested in Western investment properties, the wealth management divisions of banks have begun to accommodate them by offering more short-term revolving loans, according to the New York Times. Typically, these loans have a five-year term and are renewable annually after that, with an individually set interest rate according to the borrower’s credit profile.

The shorter time frame allows these buyers greater flexibility with their funds. “Many wealthy people may want to maintain their liquidity rather than just applying it to the real estate assets, as liquidity allows them to take advantage of investment or business opportunities that may arise,” Michelle Tan, head of real estate product management at Bank of Singapore, told the Times.

One survey by the real estate agency Cluttons and the consulting firm VPC Asia Pacific showed that London’s residential market was the preferred target of Asia’s wealthy investors.

“In today’s low interest rate environment, many Asian-based investors still see U.K. property as a good investment opportunity,” said Bryan Henning, head of global research and investments for Asia at the wealth and investment management division of Barclays.

But just behind London, New York has remained an extremely popular investment market.

However, the banks lending to this class of investor are still avoiding funding new developments, only writing loans for completed prime properties in order to minimize risk. [NYT]Christopher Cameron


Related Articles

arrow_forward_ios
(Image by Wolfgang & Hite via Dezeen)
Hudson Yards megadevelopment inspires a new line of sex toys
Hudson Yards megadevelopment inspires a new line of sex toys
Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)
Ruby Schron lands $500M refi for sprawling Queens apartment portfolio
Ruby Schron lands $500M refi for sprawling Queens apartment portfolio
Wendy Silverstein (Credit: Getty Images)
Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
Chief People Officer Carolyn Patterson (Getty, Yelp)
Yelp to experiment with return-to-work plans
Yelp to experiment with return-to-work plans
Brookfield Asset Management’s Bruce Flatt (iStock)
Brookfield posts record FFO in Q1 — but not because of real estate
Brookfield posts record FFO in Q1 — but not because of real estate
From left: Furnished Quarters' Steven (left) and Gary Brown with 315 West 33rd Street (left) and 158 West 27th Street (Furnished Quarters, CityRealty, CityFeet)
Landlords sue hospitality stalwart Furnished Quarters
Landlords sue hospitality stalwart Furnished Quarters
David Schonbraun (SL Green)
SL Green investment chief David Schonbraun steps down
SL Green investment chief David Schonbraun steps down
Manhattan and Brooklyn saw all-time records in lease signings in April (iStock)
April leases soared across city; so did concessions
April leases soared across city; so did concessions
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...