A Hong Kong-based private equity firm specialising in real estate is eyeing opportunities in South-east Asia, particularly Singapore, Indonesia and the Philippines.
Phoenix Property Investors sees the move to diversify as a hedge against market volatility.
Its managing partner and chief investment officer Samuel Chu told The Straits Times yesterday: "The market is changing, and volatility - both political and financial - will continue. The key is to diversify your portfolio; you have to be rational in this irrational environment."
Phoenix has more than US$6.7 billion (S$9.5 billion) in assets under management in Asia and intends to raise its portfolio allocation to South-east Asia, where it is "very bullish" on the long-term real estate prospects.
South-east Asia accounts for less than 10 per cent of its portfolio.
The firm made its first Singapore investment in 2014, buying three pairs of conservation shophouses in Tanjong Pagar for $42.8 million.
Its other projects in the region are the Tomang Park residential block in Jakarta and Century Spire, a high-end residential and office tower in Manila.
"We like the demographics in South-east Asia - in Indonesia and the Philippines, they have a huge population with a growing middle class and shortage of housing," Mr Chu said.
Mr Chu did not specify acquisition targets and would only say that the firm will be selective and would "deploy quickly" once a deal that offers the "right value" arises.
Phoenix is open to opportunities in property segments including office, retail and residential.
Mr Chu said the firm is targeting Singapore's high-end residential and prime office assets as it believes the bottom is near for these two segments.
"We are beginning to see value now in Singapore... the residential space, if the price is right, is interesting. The office segment, if the price comes down a bit more, we think it would start looking attractive but... there is rental pressure because there's a lot of supply."
Investing in physical assets appears more attractive now, as land development is seen as too expensive given the high bids for sites.
A recent white site in Marina Bay's Central Boulevard went for a record price of nearly $2.6 billion in a bid submitted by a subsidiary of IOI Properties Group.
Mr Chu said the firm is looking for a yield of at least 4 per cent for office investments. Its shophouses in Tanjong Pagar offer a 3 per cent rental yield, which Mr Chu said is "okay".
Phoenix, which recently renovated the shophouses at a cost of $2 million, said 82 per cent of the space has been leased.
The firm, which was founded in 2002, may also consider the bulk purchase of completed private residential units if the price is right. "We think in three to five years' time, the market will recover, so we are making a medium-, long-term bet," Mr Chu said.