Real Estate Investor Magazine South Africa November 2015 | Page 58

INVESTMENT

UK Investments
Is now the time for offshore property investment?

BY RICHARD WADE

I

n September, Redefine International acquired a
UK portfolio of mostly retail and office assets from
Aegon UK, a Scottish insurance company, for
R9bn, including the Banbury Cross Retail Park near
Oxford for R1.09bn. Redefine’s CEO described it as
a “transformational deal ... which rapidly enhances the
quality and scale of our overall portfolio”. So why, with
an exchange rate of R20/£ or R13,5/$, would a major
investor want to diversify overseas? Should you think
of doing the same?
I do a fair volume of valuation and consultancy work
in the UK and the word “quality” in the paragraph above
has nothing to do with buildings and everything to do

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NOVEMBER 2015 SA Real Estate Investor

with economics. Generally, SA building standards
(with glaring examples like Tongaat Mall excluded)
are well up to international standards. In many cases,
because we have more available land, designs can be
more flexible than the constraints that have to be
adopted in parts of the developed world. However,
the value of commercial property is down to the
throughput of goods or people it can accommodate, be
it on a retail, office, industrial or leisure basis. Because
that throughput relies on the spending power of the
individual or business involved, big differences start to
show up when property investment calculations start
being made.
www.reimag.co.za