Alta partners Straits Trading to offer investors bite-sized luxury real estate

SINGAPORE - Prospective buyers looking to snag a good class bungalow (GCB) in Singapore should be prepared to fork out at least $20 million, though some of these properties cost significantly more depending on their history, heritage, area and location. 

Now, some investors have the option of including a piece of such real estate in their portfolios without the hefty cash outlay.

Alta, a digital securities exchange for alternative investments in Asia, has partnered Singapore Exchange-listed Straits Trading to offer accredited investors an opportunity to own a piece of such real estate for a minimum of $500,000.

Under a new scheme which makes investments in Singapore prime private property, accredited investors can gain access to otherwise unaffordable real estate at a fraction of the capital typically needed for a direct investment. 

Alta has set up a fund to provide investors with easy access to the Fractionalised Investment Real Estate – Straits Trading (FIR-ST) scheme. The fund aims to “confer economic benefits akin to property ownership in Singapore without the hassle of upfront payments and paperwork”.

The FIR-ST scheme introduces a new way to participate in Singapore prime property through fractionalised investing, which allows investors to buy a fraction of an asset on a digital exchange rather than purchasing it outright. 

Under the scheme, accredited investors can partake in the upside of property ownership without the burdens of landlord responsibilities, property acquisition, additional buyer’s stamp duty or cumbersome paperwork, as well as a market-adjusted dividend.

Operational costs will be managed by Straits Trading.

Mr Benjamin Twoon, chief commercial officer at Alta Alternative Investments, said real estate remains a steadfast choice for investors aiming to strengthen their portfolios, and believes this will be a game-changer for those seeking a flexible and innovative way to grow their portfolios.

Mr Eric Teng, group chief operating officer of Straits Trading, said FIR-ST will mimic the experience of buying a physical property with potentially stable returns and upside over time.

Straits Trading has been testing the waters for fractionalised investment options in recent years. 

It was reported in 2023 that the company offered two properties – a condominium unit in Duchess Residences at 108 Duchess Avenue and a freehold GCB at 8A Cable Road – to registrants of the Straits Trading Shareholders’ Club.

The projected growth rate for Singapore’s real estate market in 2025 is estimated to be around 4.5 per cent, driven by strong demand in both residential and commercial sectors. 

PropNex Research said sales activity in Singapore’s landed homes market remained resilient in the first half of 2024, with 681 transactions totalling $3.7 billion, outpacing the preceding six months. 

Despite high interest rates and market uncertainties, buyers continue to show strong demand, driving prices upward. The GCB segment saw increased activity, with nine high-value deals totalling $219 million.

There are about 2,700 GCBs in Singapore, located in 39 gazetted areas around the island. The enclaves are found in the prime residential districts of 10 and 11, and in the bungalow estates of districts 20, 21 and 23. 

In a separate announcement on Oct 29, Alta said NH Investment & Securities, one of the largest investment and securities firms in South Korea with over 60 trillion won (S$58 billion) in assets, is exploring the use of its blockchain-powered exchange.

NH will become a member of Alta Exchange, which is backed by brokers like Phillip Securities, PrimePartners and Japan’s Nomura Holdings.

NH will be able to list investment opportunities on Alta Exchange, enhancing the platform’s portfolio of globally sourced alternative assets. 

The initiative will broaden investment avenues for high-net-worth individuals, institutional investors and family offices on Alta Exchange at a time when Asia’s alternative investment market is seeing rapid growth.

Alternative investments are financial assets that differ from traditional investments like stocks, bonds or cash, and include private equity, real estate and collectibles.

The region’s private capital assets under management in this sector is expected to surge to US$7 trillion (S$9.3 trillion) in 2025, a growth rate which will outpace that of more traditional markets, according to various estimates.

Mr Kelvin Lee, Alta’s chief executive, said the company is expanding into Thailand, North Asia and across the six Middle Eastern countries of Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain and Oman.

This is especially as blockchain and tokenisation are now reshaping how people invest in alternative assets.

“What used to be exclusive to large institutions is now opening up to a broader audience, with demand for accessible, transparent investment options growing fast,” Mr Lee said.

Globally, alternative assets are expected to hit US$21 trillion by 2025, reflecting a powerful shift towards more inclusive and efficient ways of building wealth, he said.