Real Estate Investor Magazine South Africa March 2015 | Page 55

REI offshore
Where is the best place to invest?

L

ast year saw London and New York
underpinning the importance of investing into
strong currencies, as well as strong economies.
U.S.A.: “I still like New York, albeit lots of
value has gone into most parts of Manhattan,
New Jersey and Brooklyn are still well priced.
I see Chicago and Miami strengthening further
as these markets continue to recover from the
peaks of 2007,” says George Radford, Director at
IP Global.
UK: There is still huge opportunity and value
in locations around Central London as the ripple
effect of Prime London gathers pace. Greater
London has some exciting investments in areas
which will appreciate significantly through 2015.
Manchester is the second largest economy in the UK and prime city locations are
undervalued. Quality one bedroom apartments start from around £125,000 with
strong yields of 5.5%+.
Europe: Berlin is one the most undervalued property markets in Europe. The
average property price through the city is just over €100,000 for a quality apartment
with strong rental demand - over 50% of the population rent property.
Australia: is a great market, with strong growth across the three major cities,
but better value is on offer in Melbourne and Brisbane, over Sydney.
Keep it safe and stick to strong, low risk markets. With volatility in the stock
markets, low oil prices, and the uncertainty of gold, investing into property will be
the real winner in 2015, as long as you do your research and choose your investments
smartly.
Marc Wainer
Executive Chairman
Redefine Properties

Redefine has purchased a German portfolio of
56 retail properties through a joint venture with
Redefine International. It is valued at about €157
million and reflects an initial net yield of 7.5%. It was
acquired with the existing bank debt of €100m which
the joint venture will refinance immediately after the
transaction closes. After financing, it will produce a
yield on equity in excess of 11%.
V. Gikonyo Gitonga
CEO
Axis Real Estate Kenya

There are lots of other macro-economic factors that
come into effect and changes in regulations such
as the growth of new cities. The defying ones will
be Konza City, Tatu City and other projects that are
going to come on stream that are large mixed-use
developments, especially like in Nairobi we have got
Uchumi which has been done by Kirubi Developments
(which is a Santam project).
www.reimag.co.za

Expert Q&A
Restricting foreign
ownership of property

Samuel Seeff
CEO
Seeff Properties
Q How will foreign ownership of
private residential property affect
land reform?

The wish to restrict foreigners seems to be
more about politics than land redress. Rather
than advancing a solution to the land issue,
it sends the wrong message to investors and
puts undue pressure on the property market.

Q Is a foreign buyer a permanent
resident or a visitor who stays for
six months?

Most of the foreign buyers are so-called

UK and northern European ‘swallows’ who
travel south to escape the harsh European
winters and stay for three-four months over
our summer. They bring Pound Sterling and
Euros. Making foreign buyers feel unwelcome
is likely to have a knock-on effect on the local
economy. Most foreigners pay cash for their
property and can only borrow up to 50%.
That is direct foreign investment. Then there
is the residual income from rates and taxes
and basic utilities, as well as jobs created for
service providers such as property, pool and
garden maintenance.

Q Who constitutes the bulk of
foreign buying?

It is not foreign visitors, but mostly those

who reside here on a permanent basis that
constitute the bulk of property buying. Many
foreigners sell their property each year,
resulting in a negligible net effect, possibly
even taking foreign buying into negative
territory in real terms.

Q What are other international
countries doing to restrict foreign
ownership?

While countries such as Australia restrict

foreign ownership, many others such as the
UK where about 15% of property is foreign
owned, is open. Given the economic benefits
of external investment, there seems to be no
reason not to take the path of the latter. This
is likely to impact n