Recap property fund takes plunge into Hong Kong residential

Real Estate Capital Asia Partners II fund is to invest in Hong Kong’s residential property market in an opportunistic project that will see it develop a 28-storey residential apartment block in Sai Ying Pun, in the Western district of Hong Kong.

It will be launched in a week’s time, and the firm envisages a 55% profit margin on the project, which has an estimated completion date of 2013. That should fit in with the 20% annual IRR that is targeted by firm managing director Suchad Chiaranussati.

Chiaranussati founded the Singapore-based firm, known colloquially as ‘Recap’, in 2004. It also has offices in Hong Kong, Beijing and Seoul. It looks for property opportunities – either development or fixing up real estate in office, retail, residential and hotels across Asia.

Recap has another Hong Kong property in its second fund, a 33-storey office block in Tsuen Wan that it purchased in the fourth quarter of 2009 as a special situations/distressed asset. The party that was building it didn’t put on an outer skin and finish it off. Recap bought it and finished it off. Chiaranussati says he is very pleased with this investment and wishes he could find more exactly like it.

Before starting Recap, he spent five years with Westbrook Partners, opening their Singapore office and he was responsible for their Asian investment activities.

Recap currently has two live funds – with money being invested into the Sai Ying Pun project being the second-to-last investment planned from its second fund. The firm manages $450 million and a third fund is on the cards. As it is being discussed with potential investors, Recap is not able talk about it to the media at this stage.