OTAN Property Funds Management has big plans to grow its business, from $45 million under management to $300 million within the next 2.5 years; and Asian investment is expected to account for half that growth.
Otan managing director Mark Butler established the property fund three years ago and has used his background in Asian investor relations to develop the business by improving overseas investors’ understanding of opportunities in Western Australia.
Mr Butler believes WA’s combination of an increasing population, rising average income, strong economy, and infrastructure investment by governments ideally positions it to offer international, and particularly Asian, investors what they’re looking for.
He said the problem with attracting investment from Asia was the lack of awareness in the region of the Perth market’s potential, and that it was a comparable option to the traditional property investment cities of Melbourne and Sydney.
“Perth is completely out of sync with the rest of Australia in a property sense,” Mr Butler said.
“Brisbane is a basket case at the moment, it is going through real battles with the economy and the floods. Sydney is really battling to get turnover – anything above $5 million or $6 million, turnover is hard to get going. Melbourne hasn’t come to a screaming halt but it has substantially slowed down over the last six to eight months.”
Mr Butler said the Asian Financial Forum, which he attended in January, reaffirmed the importance of getting the message to the Asian market to ‘invest where you trade’.
“They trade a lot with WA and Queensland so it is more on their radar. We are going to use that as a tool,” he said.
“It is about lifting the profile of Perth property in Asia, and they are only going to do that by some PR and getting it in their face; at the moment it doesn’t exist.”
Otan has several projects under way in WA.
The North 1 Subi Centro development is currently under construction and will eventually have 83 apartments and 13 commercial suites; two in-fill housing developments in South Beach will have 22 and 18 townhouses respectively; and the 1.4-hectare Queens Park development will have 48 townhouses when complete.
Otan most recently announced its 24ha Karratha residential development will deliver 330 lots to the Pilbara market and require $13 million in capital.
Mr Butler said Otan had received strong interest from investors, and while the project was funded with local capital, there was strong interest from Asia.
Mr Butler said mining had raised awareness in the Asian market to the property investment opportunities in WA, but to what degree was debatable.
“Will the price of iron ore affect property prices? I don’t think so. The property market in WA is maturing quite substantially, even if the iron ore price is halved, the population is still going to be here,” he said.
“Property investment won’t just get stronger by way of mining getting stronger.
“The mining industry does affect it, but as the property sector gets stronger and stronger, it will have less and less effect.”
Otan representatives currently travel to Asia at least every four to six weeks, with the most interest coming out of Malaysia, Hong Kong and China, while Singapore is lagging.
