Overseas Property Investment Appetite Returns To In Earnest For Uk Investors

Top Quote UK investors show an appetite to return to overseas investment. End Quote
  • (1888PressRelease) September 05, 2009 - Property investors seeking a safe haven for their money which will generate some growth have helped to significantly stimulate the market for well secured property investments which in some cases has seen yields fall back to similar levels to the 2007 peak.

    High street investments let on long term leases to the likes of Tesco have dropped to yields as low as 5.5% in the UK despite the fact that even the banks with an appetite to lend will only commit to around 65% of the purchase price.

    During the boom many UK investors saw more attractive returns overseas but when the market turned most quickly retreated back home having suffered heavy financial wounds. It seems however that the appetite to gain an investment edge has returned in earnest. Goldenberg Real Estate LLP, the niche West End based investment broker has witnessed unprecedented interest in the sale of a £6,000,000 prime retail property in Southern California which is let our very own market leader, Tesco (under their US Fresh and Easy brand) and the largest US pharmacy chain, Walgreens.

    Bradley Goldenberg of Goldenberg Real Estate LLP comments that “The market has moved quickly, this certainly does not signal the end of the recession but for savvy investors seeking a safe haven for their hard earned cash this opportunity is a good one. Tesco and Walgreens are two of the world’s best known day to day retailers. Nowadays it is rare to see a retailer in the UK enter into a lease of longer than 15 years so to have two of the biggest each committed for at least 20 years is significantly attractive and of course an initial return of 7.25% is of huge value relative to yields available in the UK where a comparable deal could show only 5.5% or even lower. Southern California is an area well known to us Brits, it is not like the deal is located in the middle of nowhere and these factors combined have contributed to a level of interest that we have not seen for at least 2 years”

    The property is located in Orange County, the home of Disneyland and Knotts Berry Farm. Orange County is next to Los Angeles and is the 3rd most populated area in Southern California. Having been constructed last year and situated on a major road which attracts 70,000 passing cars per day the opportunity to invest appears to be a sound one. The Tesco operation benefits from a lease which runs for 20 years and Walgreens are committed for 75 years. Such an investment in the UK would likely achieve a yield of 5.5% but the asking price for this property would show a purchaser a return of 7.25% and that excludes the added benefit of rental increases built into both leases.

    bmg ( @ ) goldenberg dot co dot uk - tel +44 (0) 207 491 4101

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