Tan Kin Lian's Blog: Investing in land outside Singapore

Friday, April 23, 2010

Investing in land outside Singapore

Someone sent me an e-mail to explain the "professional approach" taken by a land banking company operating in Singapore in submitting applications for approval for development for green belt land in the UK. Some other people said that investing in these land banking plots is similar to investing in properties in Singapore.

Some knowledgeable people told me the following poitns:
a) The land banking plots were sold at 20 to 30 times of the real value of the greenbelt land
b) The chance of getting approval is very slim (and I guess that it must be less than 1%)

Many investors have told me that they invested in these plots and, after waiting for many years they have still not got back their investments. If they sell now, there are no buyers for their plots. Some investors bought the land with an option to sell the land back after 6 or 12 months to the promoter. The options were not honored. They were asked to roll over the investments or to wait for new funds to be available in the future. It will be a long wait.

Tan Kin Lian

5 comments:

Anonymous said...: Land Banking especially in UK is
basically (legal) scams!

The sad truth is the plots of land sold by Land Banking firms have about a 1% chance of receiving planning permission over the next 20+ years.

Keep on hammering at them(scammers) until they disappear from our shores! Make them tell the truth since so many complaints
not settled.

Some Bad Foreign Talent Promoters
doing CON job to trick Asians into
investing blindly.; April 23, 2010 9:42 AM
Anonymous said...: "Some investors bought the land with an option to sell the land back after 6 or 12 months to the promoter. The options were not honored. They were asked to roll over the investments or to wait for new funds to be available in the future. It will be a long wait."

The above product doesn't sound like a typical long-term landbanking deal, more like short-term money lending. Wonder if investors ask a logical question like "where is the funds for paying interest to investors coming from if the land is not yet sold nor yielding income?" If such a deal doesn't make sense structurally then it shouldn't be put in the same pot as a typical lndbanking deal to condemn the latter.; April 23, 2010 2:52 PM
Steve said...: Some years ago i applied for change of use of garden land in the UK. The process is low cost and fast. My application failed first time but I then appealed and it went through. It took me 4 months. This was not green belt land.

Every land banking company could start their planning applications today. They dont because in 4 months you would know you have a bad investment.I only know of one land banking company that has applied for planning permission and it was soundly rejected both times. However they spent 3 years on the application and appeals process which was enough time to get even more investors. They simply pay a small amount for a few reports to give the impression that they are serious. These reports have no legal status.

Let me give an example.
I can get legally get the following reports prepared for the Padang in Singapore.

.Impact of building on wildlife
.Impact of building on traffic needs
.Proposed alternative site layout
.Possible building designs
.Proposed access arrangements
.Singapore housing needs for next 10 years
.Singapore planned population growth
.Increase in Singapore property values over last 20 years.
.Number of tree in the area

I can also write a letter to Singapore govt requesting change in status of the land.

So i can have 9 reports and a letter and have some historic data related to the Padang in Singapore while having no rights at all to build on it. This is what Land Banking scams do. They package linked pieces of positive information and make it look like a packaged business case.

But it isn't a business case - its a scam.; April 23, 2010 4:50 PM
longterminvestment said...: is long term investment, 10-20 years later, it may have value, if not wait another 10-20 years. 40 years no value, can wait another 10 year.; April 23, 2010 8:11 PM
Anonymous said...: Unlike the Al-junieds, Al-sagoffs,Ellisons and Tan Tock Sengs, who bought land a century ago in Singapore and Malaysia, people should never buy land in another country. Never.

In the past, even with greater risks like change in Governments and defeat in war, the land could be protected by sheer force.
It cannot be done now days.

If you want risks, and high returns, use the money and time to rob a bank or goldsmith shop. You will know for certain the rewards and also the consequences if you fail.No one else can be blamed and you cannot say: "I was not told" or
there was no transparency.; April 24, 2010 3:49 PM