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continued…(pls read with previous post)

Next up is Walton International, the company that many investors in Malaysia and Singapore have heard of and even, invested money in.  

RST on Walton International’s performance and track record:

Walton Developments have just recently had several projects mature, where planning has been obtained in Canada and developers have stepped in and bought. Investors have made substantial gains, anywhere upto 580% That’s not bad at all, I think you will agree. Now there is $500million of their client money looking to buy another slice of the Walton action, and who wouldn’t after this show of success. 

Walton is to date the most well-known of the land-banking companies in Malaysia and have offices in KL and Kuching. According to their website, Walton focuses on “the purchase of strategically located raw land in the path of development of major North American cities”. Walton manages 22,500 acres, predominantly in Calgary and Edmonton, on behalf of over 35,000 investors worldwide. There’s no mention of what type of returns to expect on their website, and I’ve read widely varying percentages from trawling the forums. However, they appear to be aggressively growing their presence here in Malaysia with two offices and a sizeable team of local consultants.

I’d never heard of RST until I saw the post from their marketing director, but for the sake of comparison so we know the modus operandi of land-banking companies closer to home, I’ve included some info about this relatively new market entrant. RST’s first and current project, White Sands Beach is a piece of 104 acre beachfront land in the Trat province, at the eastern most frontier bordering Cambodia. This province is also where Koh Chang, Thailand’s largest island after Phuket is located.

According to the RST website, the WSB project is located within one of the two main beach areas in Trat province that have been designated as beach resort zones by the Thai government.

RST on land ownership in Thailand and Royal Siam Trust (RST):

Up to about 100 years ago none, other than Thai Royalty, could own land in Thailand. Over the first 50 years of the last century, much land was gifted or sold by the royal family and came into the hands of farmers etc, some of whom became wealthy in terms of land but had little business acumen and no real idea of what to do with this land.  

One such family are the owners of RST, a company that was originally set up, on the advice of their accountants and business advisors, to manage and utilise their land assets to the fullest extent. 

In the past 10 years or so a lot of the land has been utilised, through RST, for development projects and in November 2004 it was decided to take this one stage further and syndicate some of the land so that everyday investors could also get access to land banking opportunities in Thailand. 

RST on RST and issue of transparency:

The issue of land ownership in Thailand (and elsewhere in Asia) is more complex than UK or Canada. A foreigner cannot own land in Thailand, but they can own up to 49% of a Thai company. For this, a special purpose company “White Sands Beach” was set up in Thailand. The title deed to the land…was then transferred from family members to WSB. So now WSB owns the land legally.

At the start, RST was 100% shareholder in WSB, but over time 49% of the shares will be sold to overseas investors. This way they can own the land, but it still raises questions about share of profit and voting rights … The 49% of shares that are transferred are allocated to investors as preference shares with 2:1 voting rights so that all voting control lies with the overseas investors. They decide when to sell the land and who to sell it to. Preference shares also participate exclusively in profit…

… Legally certified, translated copies of the land title deed transfers and the memorandum and articles of association of WSB are available for anyone to inspect or pass on to legal council before deciding to invest. I’m not sure what else we can do to offer greater transparency except allowing people to visit the land, which we also do! 

RST on appreciation potential of land in Thailand:

Thailand offers a great opportunity. The government is spending heavily on infrastructure to increase tourism …The plan is to increase visitors from around 14.5million today, to 20million by 2010. They have to have hotel rooms and facilities. The Thai government has already singled out the Trat Province on the eastern seaboard, in the Gulf of Thailand, as the place to develop into the new Phuket! 

Many reasons for this. The land is cheap, the war with Cambodia finished a long time ago, the province has Thailand’s second largest island; Koh Chang (Koh Samui is smaller!!) and there is no history of flooding in the area; pretty important as we had a tidal wave that hit Phuket not so long ago!A new airport has already been built and a new highway to the border and on to Phnom Phen. Eco Tourism is the name of the game now, so planning will be available but in limited areas on the islands and the mainland, and what you build and where will be heavily regulated.  

…(White Sands Beach) is 104.4 acres of beachfront land in zone 6 of the development plan. This zone is one of 2 zones on the mainland set aside for beach resort development. Now, I can’t guarantee that all this will happen, but the government are already 3 years into an 8 year development plan, and even the recent Coup D’etat hasn’t slowed things down, with the new government still committed to infrastructure spend, so things are on track and looking good. 

For more info, you can contact RST‘s office is in Bangkok phone +66-(0)2-231-8052 fax +66-(0)2-655-7028 or send email to: info@royalsiamtrust.com. For those interested in owning their own piece of England, Profitable Plots has an office in KL: Tel: +603 2143 2468  Fax: +603 2143 3306 

For Walton Malaysia: 1-800-806289 (toll-free). 

All in all, from the info I know so far, I would rate investment in syndicated land banking under the high risk category but with the potential to achieve spectacular returns if the land is approved for planning and development. This may be 3 years, 5 years, 10 or even more years down the road so a long term view should be taken 

It is good to do research on the company you are dealing with including getting info on company background, management, land titles, performance track record and testimonials, etc  

Finally, I didn’t actually find out how much the minimum investments are for the above – I recall from a conversation with a friend about Walton that it is somewhere in the region of RM20k and I would guess this applies to the other companies too.

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