Dec. 3--After freezing property investment for 30 months, the Singapore-based investor Real Estate Capital Asia Partners (Recap) has resumed taking over unfinished properties in Asia's major cities as prices bottom out.

The company's first two destinations are Singapore and Hong Kong, where property is now priced at about half of the 2008 peak levels, said managing director Suchad Chiaranussati.

"We had no new investment for two and a half years as it was not worth doing," he said. "Since June 2009, Recap has started investing in residential properties at some projects in Singapore with a spending of 1.3 billion baht."

In Hong Kong, Recap has invested 2 billion baht in a 90 percent-complete office building that it plans to sell in the next two years. Investment in Hong Kong and Singapore is under Recap's Fund II worth US$200 million.

The high-end residential segment in Singapore and Hong Kong has significantly recovered now after a bottom early in the year, he said. Compared with the two destinations' late-2007 peak, property prices were 30 percent to 50 percent early in the year and are 80 percent now.

On Tuesday, Mr Suchad flew to Tokyo to finish a deal for residential and hotel properties after spending a few hours visiting Bangkok. Tokyo is the most attractive location for property investment with a yield of about 6 percent to 7 percent, he said.

"Overseas property investment should be a takeover of existing properties as you can underwrite capital gain, which might be as high as 20 percent to 30 percent," said Mr Suchad.

Mr Suchad, who travels constantly in search of properties to invest in, said Dubai's recent crash would have a limited direct impact as the emirate's population is relatively small.

"What will get an impact is confidence," he added. "The Dubai crash is just a shock to the world but it will not lead to a recession."

Though property prices in Dubai might fall by half, he said, Recap would not invest there as it is not the company's target. On the other hand, a plunge in prices in Singapore would be interesting as it is a prime area.

As an opportunity fund, Recap has no investment budget for Thailand but will invest only when it sees an opportunity. The company is in talks with some local financial institutions to buy non-performing loans (NPLs) that have interesting assets as collateral.

Recap entered the Thai property market in 2005, investing in the luxury Millennium Residences on Sukhumvit 18, a property worth more than 10 billion baht. The project is now 85 percent sold and units will be delivered to customers in January. Recap will gain about 3 billion to 4 billion baht from the project but has no plans for further investment in Thailand, he said.

"Politics is an important factor. Political instability affects return on investment and risk," he said. "However, property prices in Thailand are the cheapest in Southeast Asia as supply is not controlled, unlike in Singapore and Hong Kong."

Recap had three hotels in Phuket that saw a 15-20 percent drop in occupancy and a 20-50 percent fall in revenue.

"Thailand does not lack land but capital. We have had no capital from foreign investors since we had political problems," said Mr Suchad. "What's more is the reputation, as the Hamburger crisis largely destroyed reputations."

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