Real Estate Investor Magazine South Africa October 2018 | Page 50

UNITED KINGDOM
Could Manchester be an
investor’s dream?
R
apid growth in the Manchester property market could
offer a profitable solution for South African property
investors
The South African economy is increasing, with growth
expected to hit 1.7 per cent by 2019, however, although there
is some growth present, the rate in which the local economy
is growing is almost half as slow compared to the rest of the
world. This is leading investors in South Africa to diversify
their portfolios and look for investment opportunities outside
of the borders.
Adam Price, managing director at Select Property Group,
said: “Economic volatility and a fluctuating rand means that
simply cashing money into overseas banks is no longer a viable
investment strategy. Investors need to be looking to diversify
their investments and establish a portfolio globally in order to
provide good capital growth prospects.”
South African property investors looking to spread the risk
and delve into the international property market are being
encouraged to look to regional cities in the UK. Even with
Brexit looming in the UK, the statistics are speaking volumes;
the City of Manchester is clearly a new ‘hot spot’ to invest cash
in residential property.
The northern city boasts over 530,000 residents and a huge
student population of 85,000 – strong. With demand for city
centre living, urban generation programmes and growing
commerce credentials, as a result of the Northern Powerhouse
initiative, it’s being cited as the property investment hotspot
for overseas investors in 2018.
Buoyed by strong performance levels, investors from around
the world have identified the huge potential of owning real
estate in Manchester. Property prices rose by 30.8 percent
between 2014 and 2017 and, by 2021, values are expected to
surge by a further 28.2 percent – 15 percent faster than the UK
average. Monthly rental rates are also expected to accelerate by
a further 20.5 percent by 2021 – 2.9 percent faster than the
UK average. All pointers indicate that Manchester’s popularity
is set to continue to thrive and, with it, the demand for sales
and letting.
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OCTOBER/NOVEMBER 2018 SA Real Estate Investor Magazine
The effect of Brexit has had a positive impact
for overseas investors
Adam Price, managing director at Select Property Group,
said: “We’ve seen an increase in interest in Manchester from
overseas property investors – and not just from South Africa.
During a recent survey, we found that almost 80 per cent of
GCC investors agree that the UK is a strong place to invest in
property, with 13 per cent of those highlighting Manchester as
the top place that appealed to them, second only to London.
Over 70 per cent also agreed that the rental yields in northern
cities are greater than London.
“Brexit has had a huge impact. The uncertainty surrounding
Brexit has subsequently caused a fall in value of the pound,
meaning UK property is now as much as 12 per cent cheaper
to new investors. This has led to an increase in interest from
overseas investors.
“We found that over 70 per cent of GCC investors believe
that Brexit has made UK property more affordable. This is
something we’re increasingly hearing from South Africans, as
anecdotal reasons for wanting to invest in regional cities.
“However, once Brexit negotiations with the EU conclude,
uncertainty is lifted, and Britain’s economy begins to stabilise.
Those who invest now will see the strongest capital gains and
ROI in the coming years – a win-win for savvy South African
property entrepreneurs.”
All the statistics indicate in favour of Manchester’s continued
growth and it’s showing no signs of slowing down – this is just
the start. There are a planned 12,000 residential units due for
completion over the next two years in the city centre alone, so
the opportunities for South African investors are endless.
Select Property Group has also appointed a business
development manager for the South African region, Tigran
Smith. Tigran spends half of the month on the ground in
South Africa, visiting both clients and agents.
SOURCE
Select Property Group