Real Estate Investor Magazine South Africa Real Estate Investor Magazine - November 2017 | Page 60

LISTED
Safer Than Houses
UK investment
opportunities abound
BY MONIQUE DU TOIT
S
avvy South Africans looking to invest in offshore prop-
erty have long considered the United Kingdom to be an
ideal location. For many, however, taking the plunge is
daunting. Adding to the uncertainty is Brexit negotiations,
global political uncertainty, and a weak Rand. What is an in-
vestor to do? To find out, we spoke to CEO of Atlantic Leaf
Properties, Paul Leaf-Wright, about the way forward in one of
the busiest property markets.
ATLANTIC LEAF PROPERTIES
Dual-listed on the Johannesburg Stock Exchange
(JSE) and Stock Exchange of Mauritius (SEM), Atlan-
tic Leaf Properties specialises in commercial prop-
erty investments in the UK. Showing a 15% growth
from HY2016, the Mauritian-based company has
£304 million worth of assets under management.
The majority of Atlantic Leaf Property’s investors
reside in South Africa, with the company having
boots on the ground locally, in Mauritius, and in
the UK. It is the first pound-denominated Global
Business License company to list on the SEM.
Leaf-Wright highlights several macro-trends impacting the
real estate market - both within the UK and internationally.
One of the biggest, the rise of online shopping, is also one
of the biggest opportunities. Commercial property, specifically
distribution centres, are showing impressive growth, as the rise
of online shopping becomes more apparent. “It’s only going
to keep growing, as current figures of 15-20% of UK retail
happening online continues to rise.”
While the economic future of the UK within the context
of Europe and the world may be uncertain at this stage, Leaf-
Wright points out that domestic trade and industry is prom-
ising. Regional hubs, such as Manchester, continue to show
58
NOVEMBER 2017 SA Real Estate Investor Magazine
stable growth in terms of office space. In comparison, Lon-
dons’s booming property prices are more volatile. “With the
residential property market struggling, and premium offices in
London facing uncertainty regarding big businesses moving
their offices, it makes sense to invest in areas where there is
more growth.”
What makes commercial property a good
investment?
Stability is at the heart of Atlantic Leaf Property’s approach
to investment. Leaf-Wright explains that commercial prop-
erty offers several advantages, particularly when investing
in existing developments: “You usually have one tenant per
commercial property, simplifying the management and daily
operations of the property. In addition, we usually have long
leases – our average is over 11 years - ensuring a stable income
for the future. The importance of finding the right tenant can't
be ignored, but once you have that, commercial property offers
a lower-risk investment than most others.”
After selling Leaf Property Fund to Redefine in 2014, Leaf-
Wright made the move to offshore investments. “We decided
on the UK due to the enormity of the market. The high supply
and demand levels make it a dynamic place to invest, with the
option to sell with ease, should you wish. There’s also tremen-
dous room for growth, low interest rates, and yield rates on
property are higher than debt rates.”
The company has big plans, starting with projected full-year
distribution of 9.1 pence for 2017 – and AUM is £350m, a
figure that’s set to double in coming years. A total of £47 mil-
lion in equity was raised in September of this year alone, with
the company expecting to list on the London Stock Exchange
within the next one to two years.
By focusing on one market, Leaf-Wright explains that they
are in the position to grow steadily over the next few years.
At this stage, they are one of the smaller names in the UK
real estate industry, something that could very well work to
their advantage, since it enables them to curate their portfolio,
“making smart choices regarding the properties we invest in.”