Guiding consumers since 2009

UK property looking good

By Staff Writer

By Xolile Bhengu

Local property investors have an opportunity to invest in the UK property market as values in the short term continue to drop — by as much as 20 percent.

The Broll Property Group said the UK property market had suffered some knocks in the past year.

Due to the impact of global market volatility on the British banking sector, there has been upside in property lending. This has made it more affordable for SA investors to access commercial property investments.

The company said the UK commercial property sector had gone through a significant slump, with capital values falling an average of 15 percent since June 2007.

David Adams, investment broker for Broll, said some UK properties, which had long strong tenancies, now had net incomes greater than the repayments on a property that is 100 percent financed.

He said unlike the UK, South Africa’s commercial property market had not been hit by the credit crunch, and many investors had built up significant equity in their portfolios, but investors had limited themselves to local opportunities.

“The diversification play of investing in UK property brings the advantage of investing in a property sector that has already seen a significant correction, and is attached to first world currency in a very stable country.

“The highest yields are typically in the industrial sectors outside of the South East (of the City), where 8 percent returns, and even 8.5 percent in some cases are achievable,” Adams said.

Catalyst Group agreed that the UK’s listed property — particularly in the last three to six months — was trading at a discount to net asset value.

Paul Duncan, investment manager for the Catalyst Group, said in the short term the volatility in the property market should remain, but long-term prospects in offshore investments were looking good.

Duncan said that developed markets such as the UK were well understood and trusted by investors across the globe.

“There is relatively more confidence from foreign investors in the UK as a transparent and well understood market, in which there is readily available information,” he said.

“Any investor must do research to ensure that the returns they expect will be worth the risk, and whether they will achieve the returns that they demand.”

Recent Articles

Featured The bank took money from my account – is this allowed?

You’ve just deposited money into your account and suddenly you see a notification from your bank. Money has been deducted from your account to pay the outstanding debt that you have with the bank. Is this allowed?

How much does it cost to draft a will?

Having a Will allows you to determine who inherits your property when you die. If you die intestate, the government will determine how to distribute your assets. Many people die intestate because they don’t know how to draft a will or are intimidated by the costs of drafting one.

Is your home correctly priced for the current market?

The property market is typically in either one of two phases, a buyers’ market or a sellers’ market. According to real estate experts, we are currently in a buyer’s market. For this reason, it is important as a seller to correctly price your house to ensure interested buyers and a valuable sale in the end.

Fuel rewards programme – how to fill up on petrol and points

South Africa’s volatile economy has often meant that factors like the fuel price bear the brunt. This year alone the country’s fuel price has fluctuated by between R1.50 to almost R3, which has put increasing pressure on motorists. That said, many of the bigger South African brands have provided some relief by way of fuel rewards programmes.

Deals

Wax On Wax Off Wednesdays at Rouge Day Spa

Price: From R50
When: Wednesdays
Where: Cape Town

Aarya Restaurant Christmas Lunch Special

Price: R425
When: 25 December 2019
Where: Johannesburg

Da Vinci’s Tantalising Tuesday Pizza Special

Price: Available on request
When: Tuesdays
Where: Cape Town