OWNERSHIP OF A PRE-DEVELOPED LAND PLOT-
An Alternative to Properties, Gold and Stocks
A map detailing locations of land plots owned by
Walton International and its clients
SINGAPORE – has the economy downturn brought about financial instability to your investments in unit trusts and even properties? Are you tired of burning your hands playing stocks or starting to lose faith in sound investments after the infamous DBS-Lehman Brothers saga?
If the answer is yes, it is time to start looking out of the box and trying other means of sound investments such as pre-developed land investment. This is a safe form of investments that rides along the same risk profile as your bank securities, offering portfolio diversification and you get to own a plot of land – which is a dream that most Singaporeans find it hard to fulfill.
Mr. Edward Yeow*, manager for Walton International Land Banking Group, shares with us on land banking and why it is a good platform to park your monies and collect returns of up to 580% in 3-5 years’ time.
“This timeline is short, but the returns gained surpass other investment instruments’ by a good 100%. Even fixed deposits of 3 years do not generate the kind of returns you get from investing in raw plots of land.” He says enthusiastically.
Left: Walton International is the largest land banking firm in North America and Asia
Right: bird’s eye view of acres of raw land targeted for development in the near future
Right: bird’s eye view of acres of raw land targeted for development in the near future
Walton International, the largest land banking firm in North America and Asia to date, focuses of the purchase of strategically raw land in the path of development in major North America’s cities. They now have more than 35,000 clients all over the world. “The value of a pre State-authority-approved agriculture land plot and the value of a State-authority-approved agriculture land plot differ largely. We buy the pre-approved plots of land at a low cost and sell it to investors for only $10K per unit. So far, our lands are increasing steadily in value and our investors are kept closely updated on their potential gains,” Edward informs.
He goes on to explain that the concept of land banking is not very different from investing in properties such as condominiums or landed properties. “You buy a condo unit or even HDB flat in a rural area of Singapore at a low cost. In a few years time when infrastructure are built up – MRT stations, food centers, even heartland shopping malls – the value of these condominiums and flats rocket. Then you sell them and reap the profits.”
“Land banking is similar. You buy a plot of unused land collectively at a low cost - $10K for a unit of 2.5 acres. When the blueprints for this land’s development are drawn up and the idea is sold to developers, investors collect a big fat cheque at the end of it.” Edward continues as he walks us through the spacious offices of Walton International Singapore, located on the 35th floor of Republic Plaza.
Land ownership used to be available only to the very wealthy, is now something that anyone who is interested can have ownership over. One of the main reasons is the presence of more and more competitors out there, such as Land International, Strategic Land Investment and UK Land International, all of whom offer the same quality real estate product of raw land carefully researched for at least two to three years before putting up for sale.
We take the opportunity to ask about his experience as a land banker.
“We call ourselves Land Banking Consultants instead of land bankers actually” he corrects us. “I started out as a fresh graduate from University of Singapore 2 years ago. At first I was quite skeptical about the idea because it is something new to Singaporeans and unlike properties (even condos these days), people cannot invest in lands using their CPF monies. But as time passed by I learned that there are many cash rich Singaporeans out there, just that they are leaving their monies in unit trusts, savings plans and gold. I convinced them to park their monies with Walton’s land, and they readily agreed to the idea because this investment is easily transferable and a tangible asset.”
Mike Lee*, ex-financial adviser, is one of Walton’s clients and has bought 3 units of land some years back. “In these 10 years, Walton has never lost a single cent for their clients. I am glad to know that they have good judgment in the land they purchase, and are able to come up with good plans for development – ideas that definitely sell.” He reaped a profit of 12% three years ago when a plot of land in Edmonton matured. His current colleague, Ms Miriam*, a Nurse Educator, agreed that she profited from the investment as well.
A sample blueprint of a plot of land about to mature and sold to developers
“When Walton approached me and shared with me this idea of land banking, I was interested immediately. I believe in all sorts of investments – talk about gold, stocks, shares, unit trusts, properties etc... I have a hand in everything. So, since I had some money on hand to play around with back then, I put in 30K just to see if Walton’s investment strategy was really as good as they made it sound. And I thought to myself, should I lose this money, it shall be a lesson learned and at least I would know that Walton is just another company that over-promises but under-delivers.” Mike. says with a casual shrug of the shoulder. It was a pleasant surprise for him to receive a cheque for the high profits yielded through this investment.
“We do surveys on the streets and also over the phone,” Edward confides during our follow-up phone interview. “Out of ten people we talk to, at least two to three are receptive to the idea of land banking. There are also those who feel that this is more affordable than purchasing a condo unit.”
When asked if Walton would consider purchasing land outside of North America, he said yes without hesitation. “In fact, our Malaysian offices are already dealing with Thailand land plots. It is very rare to own land in Thailand, because in the past, only the royalty get to own plots of land in Thailand. It was very difficult for foreigners especially to penetrate land ownership there. Therefore, our Malaysian counterparts are doing very well.”
These development plans that Walton International often speak of, what do they usually develop their raw land into? Do they sell the land to governmental or private developers?
“Private, usually, there is less red tape or restrictions transacting with private developers. Besides, I believe that governmental projects are usually planned by them in advance and should they wish to acquire a piece of land, there is no consideration for our development plans.” Edward also shares with us that raw land is developed into either residential or commercial areas, depending on how it is able to fit into its surroundings in the future.
Coincidentally, Edward’s take on governmental development is the exact reason why Mr. Tan Fong Kong* , director of a law firm in Raffles Place has adverse reaction to the idea of land banking.
“I will not invest into something I cannot even see or monitor…we will not be able to establish its real value. For all you know this plot of land may not even exist, then we would become characters from the film ‘Boiler Room’. Furthermore, what if we invest in a potential plot of land and expect to get our returns three years later, but during the second year, the Canadian government decide to turn that piece of land into state land?”
He explains that there is no 100% or guaranteed forms of returns in any sorts of investments. “But when I put my monies into stocks and shares, I at least can monitor them on the Hang Seng Index or SGX. Call me old-fashioned, but I believe that land banking is still too new a concept. You don’t see many advertisements on raw land ownership in the papers or on the TV, do you?”
We concede with Mr. Chan’s observation that there hasn’t been much active advertising or promotion of pre-developed land ownership, or more commonly known as ‘land banking’. The question was addressed to Edward once more.
“Land banking is a prestige and the product speaks for itself. Just like wine and diamond investment, you don’t see many ads on them but people who are experienced with investments or are in the know-how about money-making tools would know about land banking.”
Article republished - originally submitted and published in Murdoch University's portal on 2009 by original owner and writer herein. Information correct as of November 2009.
Disclaimer: Names changed to protect privacy. This article and interview conducted herein is strictly the property of the Blog Owner who owns all copyright © and no part of this work may be reproduced or republished without the permission of the Blog Owner. All Rights Reserved.