The Straits Times - RealVantage breaks down walls in real estate investing for the masses

SINGAPORE, Jun. 10 2024 / The Straits Times / - A new global real estate fund started by Singapore property investment platform RealVantage has got off to a flying start.

The fund, which opened for investors on April 15, secured 75 per cent of its target of US$50million (S$67.4 million) by May 31, far earlier than expected.

The fund will partner sponsors and developers across Asia-Pacific, Australia, Britain and the United States to invest in middle market real estate assets, ranging from industrial, logistics, living and hospitality.

It has a forecasted internal rate of return of between 13 and 15 per cent, and a projected cash yield of 4 to 5 per cent a year.

RealVantage is an online real estate co-investment platform that allows investors to choose which deals they want to fund. They can deposit funds electronically and keep updated on their investments online without having to meet a fund manager throughout the entire process.

Co-founder and chief executive Keith Ong said he had expected to hit the first close of the fund in about three to four months, as most institutions such as sovereign funds and pensions are “not really investing" at the moment. It is also his firm's first fund.

Most of the capital raised is from private wealth, said Mr Ong, 50.

"The world climate is very cautious in investing. The second thing is for newer funds, there usually isn't any major track record. So that's the challenge. For us, our track record comes from our individual deals," he noted.

RealVantage, which was founded in 2019, has funded 68 deals, with 24 being carried through to completion, with investors paid out. Its assets under management stand at $400 million. The company, whose Singapore office is at Aperia Mall in Kallang, is planning to open outlets in Malaysia and Hong Kong in the near future, and will increase its staffing of 25 to 35.

RealVantage has funded deals for properties in Singapore, the United States, Britain, Australia and Hong Kong. That will soon extend to cover East Asia, specifically in key cities such as Tokyo, Osaka and Seoul.

Mr Ong said: "We have keen interest in Japan and I am presently exploring possible debt and equity opportunities. Tokyo is definitely on our immediate runway and we are exploring funding business-grade hotels. When we do, it will be for a one deal opportunity."

Sights are also set on Hokkaido, where Mr Ong has visited select resorts and property owners, noting: "I am looking towards a 200-room resort and to which, funding will be deployed via equity or a disbursed loan."

Property investment opportunities in Seoul will be focused on the office and retail sector, he added.

Mr Ong has spent almost two decades in various investment firms, after moving on from senior positions at the Ministry of Trade and Industry and JTC Corporation.

Co-founder Foo Mao Ching, 45, is now the company's chief operating officer. He had served as chief data scientist in start-ups such as digital financing platform Funding Societies and dating app Paktor, and was previously a quantitative equities trader and portfolio manager at Barclays Global Investors in San Francisco.

They aim to make commercial real estate investment - usually reserved for the well-off - a feasible option for the masses. The idea is to use fractional investment, lower buy-in capital and an exposure to a variety of deals across geographies to help break down the walls and create more opportunities for people to diversify their wealth.

"When people do investments in real estate, they will buy apartments in the United Kingdom, Australia and Singapore. But in this real estate business... you can do development, lend money, or fix up an old asset and make money," Mr Ong said.

“There are many ways to make money out of real estate. We open up the playbook, in that sense."

The investments are made on the firm's website, and are broadly split into two categories, income and equity.

Income deals include providing loans to a developer and collecting interest while equity deals can involve projects such as the company's joint venture with real estate company Greystar in 2023 to build rental apartments in Phoenix, Arizona, with a build, lease and sell strategy.

There are more than 6,000 members on the platform, of which about 1,000 are active, with many being repeat investors, said Mr Ong.

About 70 per cent are from Singapore, with the rest from the region, including Malaysia, Indonesia and Thailand. Overall, retail investors make up half the investor base. The rest are accredited investors, family offices and corporates.

Investors are charged fees covering acquisition, asset management and divestment, which is a percentage based on the asset value and vary from deal to deal.

"We usually charge between 3 and 5 per cent on the money they invest. We charge it on a one-off, though sometimes we charge on a performance basis," said Mr Ong. Deals that get funded within a matter of days on the RealVantage platform are typically projects with income distributions of between 8 and 14 per cent a year. There is also high demand for deals with a higher targeted internal rate of return of between 11 and 20 per cent, along with real estate income deals. Investment time frames are between one and five years.

Popular property categories include the living sector, such as residences, apartments for rent and sale, serviced apartments and hotels, as well as industrial parks, last-mile logistics and warehouses. There have also been shopping malls and high-end medical centres.

Mr Ong added: "There have been quite a number of instances of oversubscription, which demonstrates buoyed investor sentiment and that's always a good thing.

"Popular investment destinations are your usual safe haven, such as regulated locales including the US and Australia."

The average net return per annum for the realised income deals is 7.2 per cent, while the average net internal rate of return for the released equity deals is 20.7 per cent.

Though some deals have fallen short of targeted returns, Mr Ong is proud of the fact that they have not lost any money for their investors. He said: "It all boils down to investing right, making sure that the process of due diligence, evaluation, financial projections, market analysis are all sound."

About RealVantage

RealVantage is a leading real estate co-investment platform, licensed and regulated by the Monetary Authority of Singapore (MAS), that allows our investors to diversify across markets, overseas properties, sectors and investment strategies.

The team at RealVantage are highly qualified professionals who brings about a multi-disciplinary vision and approach in their respective fields towards business development, management, and client satisfaction. The team is led by distinguished Board of Advisors and advisory committee who provide cross-functional and multi-disciplinary expertise to the RealVantage team ranging from real estate, corporate finance, technology, venture capital, and startups growth. The team's philosophy, core values, and technological edge help clients build a diversified and high-performing real estate investment portfolio.

Get in touch with RealVantage today to see how they can help you in your real estate investment journey.

Disclaimer: The information and/or documents contained in this article does not constitute financial advice and is meant for educational purposes. Please consult your financial advisor, accountant, and/or attorney before proceeding with any financial/real estate investments.