THE OPPORTUNITY IN OFFSHORE PROPERTY
Have you ever wondered about the history behind the saying, “Thar’s gold in them thar hills?” Finweek was fascinated to learn that the saying emanates from the time of the 1849 California Gold Rush where citizens of Dahlonega (population 5 242 according to the US Census of 2010) began to talk about the trek from Georgia to California to find their riches. As a curious aside, in 1828 Dahlonega was the site of the first major gold rush in the US.
With gold once again in the headlines for its surge above $1 400, investors are again scouring the globe looking for investment opportunities… but in Finweek ’s view, while gold is topical, PROPERTY IS PRICELESS.
South African investors have long held an affinity for local property, where a many of t hem have enjoyed phenomenal investment returns. While some of the more financially savvy have enjoyed mentioning the ‘London f lat’, very few South Africans have made the effort to diversify their assets into the offshore property market through either direct exposure or other investment vehicles.
With the rand sitting at R10.40 to the US dollar, at time of writing, it may be worth reconsidering this strategy.
According to a research report released by Credit Suisse, real-estate investment in Germany and the US appears to be offering excellent opportunities for investors and is one of the bank’s core themes for 2013. According to the report, US retail, off ice and apartment property is not expensive at the moment compared to historical levels and, as our Context section on pages 18 and 19 shows, there are good yields to be found in global markets.
One of the major issues facing the global property sector is the spectre of rising interest rates. With the US Federal Reserve indicating that it may look to taper off its Quantitative Easing (QE) as the global economy recovers, this has worried some that property owners may start to see rising interest rates, which may impact those with highly- geared balance sheets.
However, asset manager Marriott is less concerned about t his a nd told its clients: “While we remain wary of bond markets, we believe that equity