Singapore firm pursues investment opportunities in PH

A real estate investment and asset management firm based in Singapore is setting up shop in the Philippines to pursue investment opportunities in the local real estate sector.

Yishan Capital Partners, which is led by European investment and asset managers who started investing in Asian emerging markets in 2009, has decided to focus its resources on two key markets: the Philippines and Indonesia, Yishan managing partner John van Oost told the Inquirer.

The executive was in town last week for the Philippine Investment Forum organized by Euromoney, where he was a panelist on real estate.

“We tend to invest more [on] properties that are sustainable over a long period of time,” Van Oost said.

Because there are so many talented property developers in the country, Yishan would be very selective in its projects, Van Oost explained.

In particular, Yishan is interested in investing—possibly with local joint venture partners—in logistics property. If it will venture into the residential segment, it will focus on house-and-lot or horizontal developments or townhouse-type projects rather than high-rise condominiums, he added.

As Yishan is run by a group that introduced the first real estate investment trust (REIT) in Germany, Van Oost said his group would look forward to any opportunity involving REITs once a viable tax framework is in place.

The Philippine REIT law allows property developers to raise funds by selling assets with recurring revenues, specifically by transferring those assets in a special purpose vehicle that will be listed on the stock market. This new instrument gives investors the option to invest directly in the finished product and not just in the property developer.

“We see the need for better quality logistics space. This we’ve seen in multiple markets,” said Van Oost. “I don’t think Manila needs anyone to explain how shopping centers work, but if you look at supermarkets and food anchorage, then we have the expertise on how to make those successful.”

To better manage risks, Yishan plans to start with relatively small logistics projects—whether a modern warehousing or supermarket hub—with about 35,000 square meters compared to the typical 120,000-square-meter establishments built in Europe.

Also, Van Oost commented that only the high-rise residential segment was prone to a bubble.

“For most asset classes there’s still room to grow,” he said. “We’re not property traders trying to make money in one or two years. We’re trying to be long-term investors.”

Van Oost said Yishan’s strategy in emerging markets is to build teams and employ people, rather than delegating everything to a local partner.

Yishan plans to establish a group in the Philippines this year, set its office by June, start looking for investment opportunities and undertake projects next year.

The members of Yishan’s team have invested in, and managed, more than 1,500 pieces of property globally with an acquisition value of about $15 billion.