Guys!

Further to my postings last week, I wanted to keep you all up-dated with respect to those fragmentary lose ends before the latest news hits this weekends property press…

I’ll begin with the Wheeler tribunal, hot stuff if you have any interest in Brixton PLC, now Segro PLC, or alternatively if you’re keen to know how the result will affect future tribunals. The latest goss from the tribunal is as follows: the former Brixton PLC Chief Exec will now have to bite his tongue until early April after the scheduled 3 day trial took longer than anticipated. Mr Wheeler has had to observe in silence during the initial 3 day hearing while his ex-colleagues articulated their cases against him. For those interested, allegations include the impeding of a rescue rights issue and amongst other accusations, the wringing of up to £1.88 mil from the firm.

The end of last week also saw the confirmation that GVA Grimley will be partnering with US property consultant, Cassidy Turley. In a similar move to that of DJ’s and Deloitte’s, GVA will have now a truly global reach. Other mergers and acquisitions of note include Capita Symonds’ acquisition of NB Real Estate. Certainly, mergers and acquisitions have been a running theme over the last 18 months, albeit predominately on the back of weakness, but yet will still undoubtedly play a role in shaping the property industry in the long term.

Away from this aspect of the press… latest property and market reports have been varied to say the least. Press releases from the Urban Land Institute and Ernst & Young’s ITEM Club have warned that the premature withdrawal of Government stimulus packages et al. will – as expected – have a profound negative affect on property markets. Indeed, the ITEM Club go further to suggest that, despite recent positive economic news, market fundamentals remain subdued, yet highlight the role of a weak pound in supporting foreign investment activity in the present market. Knight Frank and PWC on the other hand have released fairly bullish market reports stressing the potential for substantial returns given the position of property values in the current market. In order to understand to full implications I would encourage you all to check out the reports…

Other exciting snippets of industry news over the last week include the appointment of a new CEO at Cushman & Wakefield, while JLL have released strong Q4 2009 returns. Likewise, last night CBRE reported for the first time since the downturn that their expectation is that 2010 will see the return of a more typical operating environment; yet further positive news on the back of what has been a difficult 18 months.

Thanks for reading.

Jonathan.

Readers, after posting my first blog yesterday I’m feeling more and more like a hybrid of the BBC’s Robert Peston and CNN’s Richard Quest… a delightful thought.

Anyway, after this mornings Office of National Statistics upbeat review of official GDP estimates, I thought I’d throw together a brief commentary on current economic events.

It goes without saying that the UK economy has witnessed a hard and prolonged period of negative growth – six consecutive quarters to be precise – and the positive news of a 0.1% increase certainly provides some respite. However, the stats do conceal the fact that many analyst’s anticipated GDP returns of at least 0.2% – 0.4%; in response, this may either add fuel to market speculation concerning the long term sustainability of the recovery, and the fear of a double-dip, or conversely, lead to an outcry from analysts’ who believe the figures to be grossly undervalued.

When broken down, the fact remains that the UK has been the last of the major world players to pull itself out of recession, while ONS stats also indicate a GDP contraction of 4.8% in 2009; reported to be the biggest yearly retrenchment since records began!

On paper however I’m sure Mr Darling will be somewhat relieved that his earlier forecasts on a return to growth have been loosely correct… although clearly we did not lead the world out the global recession as anticipated! I don’t want to take anything away from what is important here… clearly the measures taken by the Labour Government and BoE – low interest rates, tax incentives, car scrappage schemes, QE and the well documented bank bailouts – have gone someway to pulling the economy in the right direction, but this positive news needs to be sustained in the long term. With this in mind, the revised ONS figures due for release in early February will likely provide a better indication of the UK’s position in the current economic the cycle.

Thanks for reading.

Jonathan

OK guys this is my first foray into the insightful world of the PF blog, brace yourself for regular – and not so regular – postings on the hot topics doing the rounds in the industry’s press.

I wanted to open my account by providing readers with an intuitive review of the 2010 market forecasts published earlier this month by the industry’s top dogs.  To do so however would be an injustice to many exciting headlines that have hit the property press recently – the hive of activity in this week’s press alone has made it impossible – and for this reason I have attempted to abridge the month’s news to date in a very short but sweet market commentary with the view of more news and reviews to follow!

In short, the headline grabbing news to hit the press has centred – in my mind – on a few distinct areas, notably, tribunals, economics, deals and of course, more deals!

The Wheeler employment tribunal has dominated the property press over the last week as the trial comes to fruition, OK this isn’t really essential news, and it hasn’t really dominated so to speak, but it is interesting nevertheless for the obvious reasons and given the magnitude of the accusations that have already been disclosed; I’ll aim to keep you posted with a blow by blow account, or at least the impending result either way!

Away from the tribulations of Mr Wheeler’s case against his former employers, a key theme of this months property press has been the resurgence in commercial property returns on the back of strong a 2009 Q3 performance.  The IPD monthly index depicts a 2.2% return for 2009 assisted predominately by the witnessed increases in capital growth – fuelled by foreign investment – and the moderation of reductions in rent.  Although this is clearly a positive for the market, the real question is whether this momentum has continued into 2010?

Initial research points to a number of deals of note this month, leading the category is the impending purchase of a commercial unit in Mayfair at a benchmark prime yield of 4.22% as reported in the property press late last week.  While both DTZ and Cushman & Wakefield have too reported sound investment deals yielding returns in and around the 5.5% mark.  Plainly, this has to be a sign of an upward market!

Finally, a special mention to Drivers Jonas, soon to be DJD after the service provider confirmed its merger with the accountancy heavy-weight Deloitte’s.  Arguably the most significant merger over the last decade, undoubtedly this represents an exciting time for not only DJ and Deloitte’s, but the property services industry as a whole!  This is clearly not a merger on the back poor performance, but rather a deal that has principally been agreed to raise the bar in terms of client services.  Over the coming months it will certainly be interesting to see how the rest of the industry react, indeed while going to press there have been murmurings of a further property partnership to be concluded this week; more info will follow …

If this early investment momentum is anything to go by, and provided it can be sustained, the months ahead are certainly going to be fast paced!  Having said this we are eagerly awaiting tomorrow’s release of key economic data which will, without a doubt, very much shape the property and eco-political landscape of the year ahead.

… watch this space.

Jonathan

Hey everyone, Ali is leaving us today to travel around the world! So I just wanted to say a big thank you from all of us at Property Frontiers for been so much fun! You are going to be sorely missed and we wish you the greatest adventure on your travels.

Cheer up, your off to see the world

Stay safe and make sure you keep in touch! We are all very jealous!

Welcome to the 2nd video in our continuing series with Bizzibox. Today David talks about Buying Off-Plan Property.

What has your experience been with buying off-plan property?

Welcome to a first in a series of video’s on investing in overseas property. Bizzibox spent the day in our offices, as they interviewed one of our Directors on all the things you need to know if you are thinking about either purchasing that dream home in the Caribbean or finding that incredible investment in some remote emerging destination.

Over the course of the next two weeks I will be posting videos covering

• Buying a Property Abroad
• Buying Off Plan Properties
• Due Diligence Essentials for Buying a Property Overseas
• Finding a Property Abroad
• Letting a Property Abroad
• Ongoing Overseas Property Management
• Overseas Property
• Overseas Property & The Credit Crunch
• Property Hotspots for 2010
• Selling a Property Abroad

Bizzibox have done a fantastic job of splitting up the videos so you can jump to individual questions within a video at the click of a button. They are a great way to take in information if you don’t have the time to do a lot of research and reading.

Once again thanks for the videos Bizzibox and please do check the blog every day for new updates.

Chris

Since the turn of the year I have spent a great deal of time researching the student accommodation market. I have read loads of articles and collated many links, so I thought I would summarise the interesting bits and if you wanted to read the articles for yourself, they are well worth reading so please do.

Many of the national newspapers and indeed most of the property investment magazines and websites ran features on where was the best place to invest in 2010 and the decade ahead. (You can see my own thoughts here) The Daily Telegraph looked to usher in a new era of property investing by looking at what the next decade may bring and in particular the coming year would hold for property investment in the UK.  Pointing to a report published by Knight Frank on  student accommodation in 2010, the newspaper states that 2010 will see investors in student accommodation as a winning choice.

This years power asset.

In further news published in PlaceNorthWest. Bramer estates, the property asset management firm of Braemer Group, has recently been appointed property manager of a 173-Unit block in the heart of Birmingham. Neil Roberts, managing director of Bramer Estates said “We are pleased to have secured this new instruction at Masshouse Plaza… The building enjoys very high occupancy levels, mainly from the student market.” The article goes on to say that student numbers are expected t0 increase by over 28% in 2014.

Focusing our attention to Liverpool, rental growth in the student accommodation sector has seen the highest increase in Liverpool, rising by 13% over the last academic year alone, this compares to an already healthy 5% average growth rate for the UK as a whole. In fact compared to the rest of the UK commercial sector which grew at only 0.6% over the past 6 years it speaks volumes about this maturing asset class. To read more on the North West student accommodation then please visit here, you will have to register your details to read there articles but it is free to do so and well worth it!

Unite who are one of the big 4 large service providers of student accommodation in the UK and operate a fund which includes 20,000 beds have just had it valued at over £1 billion. In the 12 months to December 2009, the value of the property portfolio held throughout the year increased by 1.1% and rents grew by 8.4% over the same period. Educational Investor carries the full story.

The FT carried an article just yesterday on the Mansion Group’s decision to launch an open-ended student accommodation fund for the retail market. The fund has already made it’s first foray into student halls with a purchase in Liverpool. Mark Stubbs, business development director of Mansion Group, said: “When we were first considering student accommodation we were immediately struck by the investment potential… As an asset class it is possibly best placed to endure the economic downturn affecting other property classed such as retail and commercial, largely because of the ever-increasing numbers of students heading into higher education, both from at home and abroad.”

Also I recommend checking out this link to see the performance of the Braemer UK Student Accommodation Cell over the past year compared to European property as a whole. Finally, as mentioned above,  Knight Frank published a report on Student Accommodation in 2010, it is a couple of pages long so  I will list the main bullet points below but suffice to say it is all positive news coming from one of the most long established and respected consulting services in global real estate.

• Rental growth in the student accommodation sector remains robust, recording growth of 5% per annum over the last six years, compared to 0.6% for commercial property. Substantially higher growth was achieved in key university towns over the last academic year.

• Demand for university places continues to rise. Preliminary figures suggest a further increase in demand for places in the 2010/11 academic year, with UCAS reporting a 12% rise in applications at its October deadline.

• As an asset class, the student accommodation sector is maturing and becoming recognised as an important element of the wider property investment market. Since mid 2009, there been increased demand for secure income producing assets and demonstrable yield compression.

The question I want to ask is: Did you stay in student accommodation at University and what was it like?

Many thanks for reading,

Christopher

There has been quite a bit of positive press lately about the benefits of investment within the the student accommodation sector. The only problem is it has always been rather hard to obtain good quality stock. I am not referring to individual houses of which there are hundreds of available properties, but actual halls of residence. Traditionally, these are snapped up by institutional investors and funds and it is rare that we see this type of property become available.

However, Property Frontiers has managed to source an incredible opportunity to invest in such stock within Liverpool City Centre. Now, normally I don’t like to promote any of our investments on the blog, but sometimes they are too good not to mention.

Royal Liver Building

For just £38,000 investors can purchase an invidual unit within a private halls of residence, giving a current net yield of 10.01%. The tenants are already in place and each tenancy agreement is taken for 51 weeks a year. Giving you continous year round returns. Since the building was refurbished 12 years ago, the management company had obtained 100% occupancy every year.

Finding ways to make money in a recession is difficult but if you have the cash available and can exercise your buying power, then student accommodation is one of the smartest asset classes available. Rents in this sector have increased by around 5% a year for the last 6 years compared to a 0.6% for commercial property. UCAS has reported a 12% increase in rental applications for the current academic year at October. Furthermore Liverpool experienced a 13% increase in rental growth from 2008/09 to 2009/10.

If you would like to discuss this investment opportunity with any of our consultants please call 01865 202 700 (quoting liverpool blog) or visit our website for further information.

Ok sales pitch over!

Many thanks as always for reading,

Christopher

Hi All,

We have been putting together some Property Investment Guides on Squidoo.  You can find links to these on the link section of our blog, or alternatively bookmark this individual blog for continued access.

• Florida Property Investment Guide
• Malaysia Property Investment Guide
• Belize Property Investment Guide
• Portugal Property Investment Guide
• Brazil Property Investment Guide
• Grenada Property Investment Guide
• Caribbean Property Investment Guide

For those of you not familiar with Squidoo it is well worth spending some time on the website. Loads of brilliant articles and blogs on a never ending range of subjects.

Do you use Squidoo? Have you ever posted a lens?

Many thanks,

Christopher

What an amazing year 2009 has been. Although the world of property and investment seemed to have been turned upside down recently; the final year in the noughties produced a plethora of exciting investment opportunities from amazingly low priced deals in America to Eco bio fuel and forestry opportunities across the globe.

But where and what should we be looking to invest in 2010?

The art of predicting where or where not to invest has changed dramatically over the last few years.  Whilst one could assume that the international recession would have limited investment opportunities the opposite has happened creating numerous potential property hotspots.  For example, whilst Dubai does not offer the best investment now, in 6 months time prices may have dropped so dramatically and distressed sales risen to such a degree that huge opportunities exist.

What we can predict with some certainly are the following investment hotspots:

America: With the property market in the United States still languishing there are countless distressed sale opportunities to be had across the country.  Florida was the epicentre of the global property boom and crash, and now presents us with some very attractive property deals.  More interestingly are the opportunities that exist in the major urban areas which have healthy population growth and flourishing economies.  Washington DC is thriving due to the multitude of government jobs that have not been cut in the recession and the high-tech and biotech industries that feed off the government programmes.  Other major gateway cities (with links to alternative global capitals) such as San Francisco, Boston and New York will also fair well.

UK: Much as the market has seen some improvement over the last few months we still consider there are some excellent discounted opportunities to be had in 2010.  We are predicting that the market will not bottom out until the end of the year.

Madeira: With its temperate climate, limited land and strict planning rules, Madeira offers an excellent opportunity to invest in top luxury property.  A popular holiday destination with the Portuguese, South African’s and Spanish amongst others the island bucked the trend by registering 91% occupancy for 5 star accommodation in 2008.

Brazil: With one of the world’s healthiest economic growths, Brazil’s population is becoming wealthier year on year.  Investing in both first home and holiday accommodation for the local market offers excellent growth potential.

Eco Spa Boutique Resorts: The big growth area in the international holiday market is for upmarket Eco Spa Resorts across South America, Asia and Africa.  Whilst island paradises still appeal, the latest trend is for Ecological, back to nature, Jungle locations far from the crowds.

Tropical Agricultural Land: Investing in agricultural land rather than developed land is now offering excellent financial returns.  By investing in bio fuels, bamboo, hardwood forestation and carbon credits you can help the world’s ecology, improve your carbon footprint and profit from one of the hottest investment opportunities around.

Many thanks to all our readers for your continued support and I wish you a very prosperous 2010.

Christopher