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When in­vest­ing over­seas, re­search the mar­ket’s po­ten­tial, choose your in­vest­ment provider Wisely and con­sider how hands- on you’ll be, ad­vices El­liot Vure

Prestige (Singapore) - - CONTENTS - El­liot Vure is the sales man­ager for Asia and heads up the Sin­ga­pore of­fice of Se­lect Prop­erty Group

When in­vest­ing over­seas, re­search the mar­ket’s po­ten­tial, choose your in­vest­ment provider wisely and con­sider how hand­son you’ll be

Volatil­ity in equity mar­kets, the de­val­u­a­tion of the yuan, cool­ing mea­sures and fall­ing prices in the Hong Kong and Sin­ga­pore prop­erty mar­kets have all made the in­vest­ment land­scape more dif­fi­cult to nav­i­gate. For many, chas­ing re­turns is wear­ing their patience thin.

In the search for sta­bil­ity and higher yields, in­vestors have been con­sid­er­ing off­shore mar­kets that pro­vide port­fo­lio di­ver­si­fi­ca­tion, as well as re­turns, in a strong and de­pend­able cur­rency.

At Se­lect Prop­erty Group, we’ve even seen an 835 per­cent in­crease in Asian in­vestors (a large pro­por­tion of whom are Sin­ga­pore­ans) buy­ing Bri­tish real es­tate since 2010. But for those not al­ready reap­ing the ben­e­fits of over­seas prop­erty, how should they best tackle such an im­por­tant in­vest­ment?

1: Re­search and un­der­stand where fu­ture growth will come from

Know­ing which mar­kets of­fer in­vest­ment po­ten­tial for the fu­ture will help to en­sure your in­vest­ment re­mains valu­able in the long term.

The golden rule of prop­erty in­vest­ment has al­ways been “lo­ca­tion, lo­ca­tion, lo­ca­tion” and while nu­mer­ous Asian in­vestors have been turn­ing to Bri­tish prop­erty, for in­stance, many have dis­cov­ered that Lon­don no longer stacks up from an in­vest­ment per­spec­tive. Savvy in­vestors have in­stead iden­ti­fied a new lo­ca­tion: Manch­ester.

Fa­mous for its mu­sic, foot­ball teams and in­dus­trial in­no­va­tion, the city is one of the UK’S most un­der-served res­i­den­tial prop­erty mar­kets, where a sig­nif­i­cant amount of in­vest­ment is now be­ing made into transport, ed­u­ca­tion and com­merce. In­vestors in the know are al­ready se­cur­ing as­sets to en­sure the high­est re­turns ahead of the growth curve an­tic­i­pated for the city’s prop­erty mar­ket.

An­other growth op­por­tu­nity has de­vel­oped over the past cou­ple of years, thanks to a younger gen­er­a­tion who value the free­dom and flex­i­bil­ity of­fered by rent­ing, in­clud­ing the abil­ity to take on in­ter­na­tional em­ploy­ment as­sign­ments. As a re­sult, a new type of prod­uct has emerged: Build-to-rent prop­erty. This sec­tor pro­vides pur­pose-built ac­com­mo­da­tion with the same level of qual­ity and ser­vice that ten­ants are now de­mand­ing from their rental ac­com­mo­da­tion. In the UK alone, the sec­tor is es­ti­mated to be worth £50 bil­lion by 2020.

2: con­sider how in­volved you want to be with your in­vest­ment

In­vest­ments into any tan­gi­ble as­set lo­cated over­seas will re­quire a higher level of en­ergy to man­age than those lo­cated in do­mes­tic mar­kets. In­vestors should be fully aware of what is needed to main­tain and en­sure the longevity of their in­vest­ments.

For tra­di­tional buy-to-let land­lords, the man­age­ment of prop­erty can be ex­tremely time-con­sum­ing. When half­way across the world, is­sues with facilities, pay­ments and se­cur­ing ten­ants be­comes a full-time job.

Many in­ter­na­tional in­vestors pre­fer the op­tion of a fully man­aged so­lu­tion, in­clu­sive of costs that of­fers a trans­par­ent rental yield. These so­lu­tions are of­fered by the de­vel­oper or in­vest­ment provider, who will ten­ant your prop­erty and main­tain it to the high­est stan­dards, be­fore de­duct­ing man­age­ment costs from your re­turns. As an in­vestor, you sim­ply sit back and en­joy your re­turns.

3: choose your prop­erty in­vest­ment provider care­fully

Prop­erty is a long-term com­mit­ment and in­vestors should be as wise about who they in­vest with, as who they choose to marry. Check if your in­vest­ment provider has in-house ex­per­tise and a ded­i­cated in­vestor re­la­tions team who can pro­vide tai­lored ad­vice and ser­vice to suit your needs.

Also en­sure that any prop­erty in­vest­ment com­pany you choose has a proven record of de­liv­er­ing tan­gi­ble in­vestor re­turns in a num­ber of es­tab­lished mar­kets. The best re­turns are found through prop­er­ties de­signed for end users, in lo­ca­tions of high de­mand and low sup­ply. It’s im­por­tant to take the time to dis­cover whether the prop­er­ties sold by a provider meet these cri­te­ria to be sure of sus­tained yields.

A keen un­der­stand­ing of new and fu­ture growth in over­seas mar­kets will help to set in­vestors on the right path for a high yield in­vest­ment, while the right part­ner will un­der­pin the longevity of any prop­erty. With these el­e­ments, those with a nose for in­vest­ing can take ad­van­tage of the ben­e­fits over­seas prop­erty in­vest­ment has to of­fer.

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