Introduction
Products that are offered by the pension funds are dependent on the pension payments of the investors and there are three different schemes used to structure the products, which are defined contribution scheme, benefit scheme and a hybrid scheme, which combines the features of the previous two schemes. Therefore, we need to carefully select the assets to include in the pension fund portfolio to generate returns on the $100 million investment.
The investments would be made diversely in the sector over a 10 year period. The share of the pension funds in the US is 79.4% as at the end of 2015. In this paper we form a portfolio of $100 million investments in different types of the real estate assets such as office, hotel, industrial and retail and also in REITs in Singapore. The maximization of the return is the ultimate objective of the investment from the portfolio.
Ranking & Infrastructure of Singapore
First of all, the map of Singapore which is shown below:
Figure 1: Map of Singapore
The ranking of Singapore is at the top among all the Asian countries in the list of World Bank. The country is ranked as the first country in the world for the ease of doing business. Singapore is also ranked as the first country in the Global Enabling Trade Report. In terms of nominal GDP per capita, the World Bank has ranked Singapore on number 8 out of the 183 countries in 2015. In terms of GDP per capita Singapore is ranked at number 3 out of the 185 countries in 2015. Lastly, Singapore is also ranked as the 3rd most competitive country around the world(Young, 2015).
Real Estate Assignment Harvard Case Solution & Analysis
If we talk about the infrastructure of Singapore, then Singapore has inherited its infrastructure from the colonial era and it also has a well-developed transport network. Many sizeable investments and efforts have been made by the government after the independence to strengthen the infrastructure of Singapore. Singapore is a small city state that is served by the network of 3122 kilometers of the highways. 99% of these highways are paved(Encyclopedia, 2016).
The government of the country has restricted the usage of private cars on the Singaporean roads through a number of different measures such as Certificates of Entitlement and taxes. Heavy investments have been made by the government in aviation and air service agreements have been signed with around 90 countries. The telecommunication services of the country remain under the state control and the country is also fully reliant on the imports of mineral fuel for domestic consumption which makes it vulnerable to fluctuating oil prices(Encyclopedia, 2016).
Pension Fund Investment Portfolio
The real estate market of Singapore would be challenged by a growing economy in 2017 and this would be accompanied by the imbalances in the supply and demand across the various sectors. These factors are going to add pressure to the rents and the occupancy of the properties. The investment activity would be kept measured as a result of the higher interest rates which are currently increasing.........
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