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Overseas Property Investments All Four Corners International investing tends to be about safe havens and mature markets, but there’s plenty out there for the more adventurous | Text : Elizabeth Kerr | | Photo : www.depositphotos.com | There was a time when international property investment was solely the purview of the super-rich. Global property investment in 2013 topped US$1.3 trillion — more than the GDP of Mexico, Indonesia, Sweden, Thailand, the UAE, New Zealand and Hong Kong. Everyone is doing it now. There are countless mitigating factors to consider for all investors when it comes to where, but some among the most crucial are your tolerance for risk, your budget and your investment goals. According to Knight Frank’s 2014 The Wealth Report, the most exciting emerging markets are in Africa, stemming from the continent’s exploding communications infrastructure and mineral resources. Jones Lang LaSalle predicts Narendra Modi’s landslide election victory could lead to real reform and a surge in Indian investment. Elsewhere, JLL recorded an uptake in Asian investment into Germany in May, while in April Colliers International white paper noted rising Chinese outbound investment continues to target the UK, Australia and the United States, the former two preferred by Hongkongers. Former property darling China, however, may be losing its lustre. “Prices in China are overinflated and investors are looking elsewhere,” theorises Robert Wilson, marketing and sales manager at AP Assets Limited. “Everyone is waiting for a massive property market correction to impact prices, we just don’t know how severe it will be.”  Whatever the preference, activity is at a fever pitch. While Singapore and Malaysia are keeping investors at bay because of their strict cooling measures there are plenty of alternatives. “Some of the heaviest investment is going into the UK with the focus being in London,” echoes Marcot Property director Ali Saber. The UK capital has been a favourite for several years running, and it’s going to stay that way. Developers need to finance their projects somehow, and London is in a perpetual supply crunch. “There will be continuous developments in London with regeneration areas being converted into luxury properties. London has seen property prices go above pre-recession levels with rises of up to 14 percent in the last year alone,” notes Saber. That makes London a triple real estate threat: a strong yield and capital gains location, and a safe haven. The United States also remains a favourite, particularly its gateway cities like New York and San Francisco. The country’s recovery following the 2008 GFC has been slow, but on the upside, slow and steady wins the race. “The US property market remains largely undervalued and in the early stages of its recovery,” explains Robert Pearce, director of investment consultancy Blackfish. Housing starts are a major indicator of the market’s health, and Pearce is quick to point out construction starts increased 13 percent in April over the year before and markets with the fewest are on the shakiest ground (Las Vegas). Nonetheless, the US remains attractive, with new “gateways” emerging in Seattle and Boston. “The market remains segmented with a significant bias towards construction of multi-family properties in comparison to the number of single-family home starts. This can be attributed to a shift in consumers’ preferences, with buyers now living in cities where the housing stock is largely apartment buildings and multi-family structures. This shift has also been a driver for some US cities that offer better infrastructure, economic stability and job growth to outperform others,” Pearce states. Depending on location now could very well be the time to get into the US. “Some markets are doing extremely well, while others are still underperforming. Currently we’re seeing strong growth in the Florida property market, where there have been year on year gains over the past couple of years. We expect to see growth of 35 percent over the next three years,” Wilson says.  While the UK, the US and Australia are performing as expected, there are some surprises coming from Europe — chiefly Germany and Croatia. In May, JLL released figures indicating Asian commercial investment in Europe is up 916 percent over 2011, pointing to an investor shift away from the UK. Berlin, Frankfurt and Munich are leading the charge, though admittedly Germany is still second overall. “London was, and still is, the 28


Squarefoot eMagazine 197
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