|
(Published in the The Asian Pacific Post Dec. 4, 2003)
Singaporeans rush to own land in Alberta
By Asian Pacific News Service
Land-starved but cash-rich Singaporeans are flocking to Alberta in pursuit of a dream: to own land and make money by selling it off later.
An estimated 1,600 Singaporeans have over the past few years plunked C$20,880 or S$27,708 to buy a half an acre of raw land - complete with a title deed in their name. An acre is roughly two-thirds the size of a football field.
The same amount of land in Singapore, where most of the population lives in highrises called HDB flats, built by the government, would cost hundreds of thousands of dollars.
Singaporeans, many of whom have not even been to see what they bought in Alberta, make the purchases through an office on Tras Street in the strict island republic.
Those short of cash opt to make an initial down payment of C$6,380 and take out a mortgage loan over a 61-month term at an interest rate of 11.75 per cent, which works out to monthly payments of C$147.09.
The Straits Times reported that 80 percent of the 2,000 investors lured by the Canada-based land-asset management company Walton International Group are Singaporeans.
Walton describes its business thus:
"We buy huge parcels of land, currently just in Alberta, Canada, which has a particularly good economic story going for it."
"We then syndicate that land and sell individual parcels of typically a third or half an acre."
"Our typical investor, historically, has been one retail client that buys one parcel of land for around $20,000."
The land goes through various levels of zoning up to the point, normally after four to eight years, where a developer comes along and wants to buy the land
"Historically we have returned up to 20% per annum. This business has done very well and developed rapidly."
Accountant Dayanand Menon, 41, who has bought three lots in Alberta, thinks that investing in raw land is a 'stable and long-term investment'.
"Such investments don't move quickly and won't give returns overnight, but it is akin to putting money in a safe place for stable returns," he said.
"Furthermore, the principal sum is almost guaranteed," he told The Straits Times.
This is because investors are also given the option to sell the land back to the company at the same price they bought it for after five years.
But others are not so sure about the investment.
Property consultant Chesterton International associate director Nicholas Mak said although it is good to diversify, 'risks may arise from a lack of comprehensive information on that part of the world'.
Walton, founded in 1979, claims it is the largest landowner in Calgary, Alberta, which also serves as its headquarters.
Walton Singapore executive division manager Sharon Loh estimated the average returns on three recent projects ranged from 10 per cent to 18 per cent a year.
The Straits Times said the Monetary Authority of Singapore does not regulate such businesses.
Investors, were also advised to take note though that when the land is sold, they have to cough up an average capital gains tax of about 26 per cent to the Canadian government.
-30-