PROPERTY tycoon Kwek Leng Beng has warned that most property investors follow the herd instinct and wait too long in a cautious market - then make a wrong move.

The executive chairman of City Developments (CDL) said he remains upbeat about prospects for the real estate scene in Singapore, despite recent weak sales volumes.

Mr Kwek, who was a panellist at the Financial Times Asia Property Summit held at his St Regis Hotel yesterday, said the property market is just consolidating.

The mood in the Singapore property market is cautious in the wake of the United States sub-prime crisis, with many buyers and sellers preferring to remain on the sidelines.

He said he was waiting for the opportunity to 'go in and buy at the right time, be a bottom fisher'.

But most people will do the opposite, he said. 'You notice (people) will keep on waiting... until it's too late,' he said.

'It's the herd instinct... the majority will be wrong.' A shrewd investor will act on his own, he said.

If the casino-led boom in Macau's luxury homes market is anything to go by, Singapore will do even better as it will have two casinos and other major events, he said.

'We are victims of our own success,' Mr Kwek.

'In the old days, we had only regional investors from Indonesia, Malaysia, Taiwan... But today, we have big investors like Morgan Stanley, hedge funds.'

Mr Christopher Fossick, Jones Lang LaSalle's managing director for South-east Asia, who was on the same panel, said there is now a higher proportion of investors than before, compared with occupiers.

Investors tend to be more sensitive to market sentiment, he said.

CDL, which has held back the launch of four residential projects because of poor sentiment, said in its recent earnings announcement that it plans to release them once sentiment improves and when pent-up demand can be realised.

'In the first place, we were sick,' said Mr Kwek of the property market before its recent boom. 'But today, we have shifted to another platform. Instead of relying on technology, we are relying on our status as a global city.'

He also told reporters yesterday that hotel rates will continue to rise this year because of short supply.

The office market will also do well, though rent increases have moderated. As for the much talked-about office oversupply situation come 2010 or 2011, Mr Kwek thinks supply will not pose a problem then because the current construction boom will check that.

This article was first published in The Straits Times on May 16, 2008

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