Local property agency PropNex Realty - best known for selling property - is breaking new ground by tying up with a fund management firm to invest in real estate.

The fund, the first of its type set up by a property agency, aims to buy property in Singapore, other parts of Asia, Australia and Britain.

Called the Infiniti Real Estate Strategies Fund, it is similar to a unit trust, which pools money to invest in a basket of securities.

The minimum investment is $100,000 but clients will still need to be relatively well-heeled to get the chance to invest.

The fund will be open to investors with a net worth of at least $2 million as well as institutional investors, and will be managed by Infiniti Asset Management, a unit of ISR Capital.

It is structured as a closed-end fund, meaning investors will not be able to exit until the fund is liquidated in five years.

PropNex - Singapore's largest agency with about 5,200 agents - and Infiniti are looking to raise at least $50 million and up to $100 million.

It aims to deliver returns of 6per cent a year over the five-year period. The fund will not pay dividends, and any capital gains or rental from properties will be reinvested into the fund.

Mr Vasu Menon, OCBC Bank's vice-president of wealth management in Singapore, said the fund is likely the first to offer general investors a chance to invest directly in multiple physical properties. OCBC is not involved in managing the fund.

Investors will have to fork out a subscription fee of about 3 per cent and a fund management fee of 2per cent a year. A performance fee will be collected by the fund manager if returns exceed 8per cent a year.

PropNex said the fund caters to clients who are keen on real estate but hesitant to invest given the tough cooling measures that have hit the market, and the prospect of muted growth in the next few years.

PropNex chief executive Mohamed Ismail told The Straits Times in an interview that the fund aims to invest in residential and industrial properties, and does not rule out commercial real estate as well. It was even looking at tying up with developers to build properties such as executive condominiums (ECs), he said.

"Many developers consult PropNex on the right price to bid for land, and we also help them sell their properties. With such consultancy services, we can choose to partake 5 to 10 per cent in the development of, say, an EC."

Investments in foreign property must have an estimated return of at least 10 per cent a year before the fund will be keen on it, said Mr Ismail, who said he has invested "a couple of million" in the fund.

Mr Menon noted that investors should be in for the long term as, unlike unit trusts, they cannot exit the market for five years.

"Just like any other unit trust, the risks are spread out. Property is not exactly the hottest theme now, but it still comes down to finding opportunities," he said.

"But it's what you're investing in that matters - it depends on your confidence in what you're buying into."

Investor Ho Wee Beng, 38, who works in a bank, said that five years was not that long a period to invest his money.

"If anyone wants to invest in property and expects to get out in three years, it's speculative already. Five years is okay if it's only a part of your investment portfolio."

The fund has already raised about $5 million from its soft launch last week, and will be open to investors today through its distributor SingCapital.