Banks target newly wealthy Asian buyers with short-term loans

TRD 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

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

Wendy Silverstein (Credit: Getty Images)

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out

State Senator Julia Salazar and Assemblymember Harvey Epstein (Credit: Getty Images)

Pols take aim at private equity with new plan to tax mezz debt

Treasury Department watchdog is investigating the Opportunity Zone program (Credit: iStock)

Opportunity Zone investigation won’t derail developer investment, experts say

Clockwise from top left: Jim Whelan, Larry Silverstein, Helena Durst, Teodora Zobel, Jonathan Mechanic and Laurinda Martins, John Catsimatidis, Gary Barnett, Mark Weprin, Donovan Richards, Bruce Mosler, Adelaide Polsinelli and David Schechtman (Photos by Anuja Shakya)

Reflection, resentment and some remorse: Real estate’s mood at the REBNY gala

45-10 19th Avenue in Long Island City (Credit: Google Maps)

Broadway Stages plans another LIC film studio

Firefighters work to extinguish a fire as a building burns after an explosion on 2nd Avenue in March 26, 2015 (Credit: Getty Images)

$24K in rent set in motion the fatal 2015 East Village blast. Prison now looms for the landlord and contractors

arrow_forward_ios
Loading...