Morgan Stanley eyes investment potential in foreign workers dorms

Singapore’s real estate market has been hit by the global economic slowdown. But financial institution Morgan Stanley believes it has found a prime opportunity in the form of dormitories for foreign workers.

The bank’s real estate arm manages a fund that holds a majority share in Avery Strategic Investments which owns and operates four dormitories here. They are the Kian Teck Dorm, Woodlands Dorm, Tampines Dorm and Avery Lodge.

Its latest is Avery Lodge – a S$100 million complex that is the largest of its kind in the country. It can house 8,000 workers and includes a mini-mart, gym, and a medical clinic that is slated to open in the second half of the year.

Such dorms are an “untested asset class” for Morgan Stanley, which manages nearly US$25 billion of residential and commercial assets in Asia. But it is confident of the potential.

Morgan Stanley declined to reveal how much money it has invested, but said it will be looking at more opportunities “but at a selected basis” going forward.

The bank is believed to be the only institutional bank investing in foreign workers dormitories here.

Craig Pearson, vice-president, Morgan Stanley Asia, said: “Here in Singapore, you’ve got half a million foreign workers as we all know, and there’s a large lack of supply.

“We think the lack of supply is anywhere between 50,000 and 100,000 beds. So going forward, we believe the supply and demand dynamics will remain attractive.”

Source : Channel NewsAsia – 2 Apr 2009

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