Bush

Neil Bush (R) partners with Gordon Tang of Singapore for real estate bargains

Neil Bush, brother of former US President George W.Bush, is using Singapore as a springboard to bankroll his real estate ambitions in the

U.S. Early this week, he announced that Singapore-listed SingHaiyi Group of which he is the non-executive chairman, had outbid contenders at a trustee's auction to bag a San Jose commercial condominium project 'Vietnam Town' at a dirt cheap $33 million.

The move is in keeping with the core strategy of SingHaiyi Group to scoop up distressed real estate in the U.S. in state auctions, refurbish the properties and hawk them out for profits in a market that is showing signs of revival.

Vietnam Town is one of the many projects that went into receivership in the aftermath of the financial crisis. Its earlier owner well-known American-Vietnamese developer TWM Investments and lender United Commercial had pumped in more than $50 million in the project before it failed in 2009. Unsecured creditors had also put in deposits that they could not recover as funds dried up.

SingHaiyi paid $29.8 million towards an outstanding loan and $3.25 million to acquire the 20-acre freehold project. The project, a mixed retail-cum-commercial development comprises ready 115 ready-to-move-in units of which 64 have already been sold. The remaining 51 could be sold to finance phase II of the project of additional 141 units that were sanctioned but never saw the light of the day.

The purchase appears well timed. San Jose is witnessing a rise in investor appetite for commercial projects on the back of a boom in technology. Developers like San Franciso-based Simeon Residential Properties, Cupertino-based KT Properties and Essen Property Trust are breathing fresh life into the area that has so long been a laggard in Silicon Valley. Given its bargain price, Vietnam town looks well poised to tap on the buoyancy.

Early this year, SingHaiyi (then called SingXpress), controlled by low-profile Singapore tycoon couple Gordon Tang and wife Serena Chen, announced it was looking to expand beyond real estate in Singapore to tap opportunities in the distressed U.S. market. Through a rights issue and a private share placement, it raised $180 million to fund its new strategic direction. It was renamed SingHyaiyi Group and Bush emerged as its new non-executive chairman.

Bush and Tangs have been business partners for long in Oregon-based American Pacific International Capital (APIC). APIC owns and runs a number of hotels including Hotel Metropolis and Hotel Vertigo in California. It has other real assets in China, Oregon in the U.S. Hong Kong and Singapore.

Their new venture is losing no time in the U.S. market. In less than two months, Vietnam Town, in fact, is SingHaiyi's second big purchase of distressed real estate in less than two months. On September 19, in a court-ordered auction, it bought an operational shopping mall in Cincinnati at a 77% discount to its unaudited net book value of $45 million as on June 30 at a foreclosure auction. Purchased free of any debt or encumbrances, the acquisition is already making money for the group!

Last week SingaHaiyi announced that for the six months ended 30 September 2013, its net profit after tax rose to $6.7 million The profit included a gain on bargain purchase of S$12.8 million from the acquisition of the Tri-County Mall, as well as one month of rental income.

Investors too seem to be loving the momentum in SingHaiyi. Its stock has rocketed more than 90% in less than a year, giving it a market capitalisation of $520 million and securing it a place in the MSCI Singapore Small Cap Index.