Real Estate Investor Magazine South Africa April 2016 | Page 63

OFFSHORE INVESTING

Offshore Property

a Safe Bet

BY GEORGE RADFORD

F

or investors looking to grow and protect their
wealth, it pays to understand how economic
volatility affects different investment asset
classes, particularly in the current climate.
Experienced investors have become increasingly
wise to this state of affairs, and the stability and
resilience of property continues to drive the sector
forward as a key global asset class of choice.
Global real estate assets - as part of a balanced and
diversified investment portfolio - are a good choice,
not to mention a stable asset class in times of economic
turmoil. The value of property investment over more
traditional investment asset classes can be the key to
securing strong and stable returns.”
Radford says a number of his clients have expressed
an interest in property as a fixed asset – and have
liquidated their share portfolios in order to be able to
invest in property offshore.
Five-to-ten year holding periods in proven, safehaven markets is a tactic which encourages growth
at a sustainable pace and one that has enabled our
clients to grow their portfolios during and in the years
following a major global recession.
A recent survey commissioned by IP Global,
conducted by YouGov, asked South Africans what
investment assets they held, as well as their preferences
and key concerns when it comes to investing in
overseas real estate.
When asked to pick which countries abroad they
would consider investing in property abroad from a
list of eight locations, the majority of South Africans
participating in the survey chose the United Kingdom
www.reimag.co.za

(36%), the United States (34%), and Australia (29%).
The United Kingdom remains a popular choice for
South African investors, who are looking to pockets of
value in outer London and to ‘Northern Powerhouse’
Manchester where property prices are expected to
grow by 26.4% between 2016 and 2020.
Within the UK, Manchester says it’s currently all
eyes on the country’s “second city” Manchester and
its booming property market - with forecasts putting
price growth at 20% over the next three years. The
city also has the UK’s highest rental yields which
annually averaged at 6.02% over the past five years.
The exceptional value available in the city is one of
the main draws. Despite prices rising by 6% during
the 12 months to December 2015, the average cost
of a flat in Manchester is still just over a third of the
price of one in London.
For South Africans looking to invest in the United
States, Radford says Chicago is emerging as a major
city to watch with average yields of 7.9%. While in
Australia, we continually see huge amounts of interest
in Melbourne and Brisbane.
The low liquidity level of property as an asset
class has always been a favourable point for investors
looking to avoid instability. Property markets take
more time to react to external influences, and are
therefore less likely to suffer from short-term reactions
to still-unfolding events.

RESOURCES
IP Global
APRIL 2016 SA Real Estate Investor

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