2013-09-04 09:18:12 - Laureate BVI Ltd., sees global property values improving and European and Chinese investors pouring billions into property syndicates.
In 2008 – 2010 property syndicates fell in popularity during the downturn as prices plunged by as much as 40 per cent, but now with the real estate market stabilising we are seeing money pour back into this market.
A leading indicator of the this trend is IPD, the property value benchmarking group, capital values rose by 0.4 per cent in the second quarter of the year, halting an 18-month decline in which average values have fallen 3.5 per cent since September 2011.
Property syndicates in the UK, typically buy prime retail buildings and then markets it to a number of its registered investors, breaking the gross purchase cost into a fixed number of shares. Share sizes range from £25,000 to more
According to Peter Tasca, CEO of Laureate BVI, “As property markets in major cities begin to stabilize after several years of falling values there is serious demand from Chinese, Russian, German and UK investors which are attracted by the income returns which at about 10 per cent plus, is very attractive against traditional bond and cash returns.”
“Laureate BVI offers a retail fund that has been able to offer their clients with direct exposure to otherwise inaccessible real estate opportunities globally. The returns we have achieved for our clients in 2012 is certainly a testament to the quality of assets we have acquired,” said Jacob Charts, Executive Director of Private Client Group at Laureate BVI.
Reviewing market trends and independent data according to National Realtors Association, China accounted for 12% of all non-U.S. buyers of California real estate in March of 2013. They paid an average of $425,000 which is more than the average California home which Zillows puts at $365,000.
In the same month, in Singapore, China accounted for 34% of the foreign property market, according to U.K. real estate consultancy Knight Frank.
“European, Asian and U.A.E. investors see real estate as their best source of preserving their wealth,” says Tasca.
A report by Juwai found that Australia has witnessed over 840% in Chinese growth over the last three years and the U.K. has experienced over 500% in growth. Tasca says, “This is great news because foreign buyers pay cash and will help support the uptick in prices.”
Laureate BVI retail fund which accepts investors with a minimum investment of £2,500 returned 18 per cent for their investors net of fees in 2012. The retail fund charges 1.25 per cent management fee plus 20 per cent of the profits. “Our investors enjoy the low performance rates and diversification of our fund”, according to Tasca.