LONDON PROPERTY – GETTING ON THE LADDER

Over several decades, London has established itself firmly as a global city to rival any other. Reflecting this, London property has also become one of the go to places for investors from across the world. 2016 alone saw £4.6 billion worth of investment from Asia into the London property market according to Savills1, while Q3 2016 saw £685 million worth of investment from the US2.

Alongside investment in commercial property, interest in residential London property has also spiked across the globe. Fitzrovia, Belgravia, Mayfair – the names of these neighbourhoods are synonymous with elegance and class globally, and they are neighbourhoods where pockets are deep. Interest in being part of the luxury London brand has contributed to substantial growth in London property prices over the long-term, with the latest data showing 7.5% growth in the year to December 20173.

While this investment is great for the city, and is actively changing the face of London with destinations on what were once the peripheries such as Canary Wharf and the Greenwich Peninsula becoming ever more important, it also means the market has become increasingly competitive.

Whether investing in London to generate income, or simply to own and inhabit your own slice of the city, competing with investors in what has become a global market place can be challenging. As many of those new to the market have found, often a property has already sold by the time it appears in the estate agents window.

Surveying your investments

Once an investor has found the right property in the right location and at the right budget, a second challenge is to ensure the property is as good on the inside as it looks on the outside.

Arriving in London from certain directions could leave you with the impression that you’re entering a hypermodern city – full of glass towers and new build apartments. While this is true to an extent, what also makes London great are the countless historical buildings and neighbourhoods that give the city such character.

Buying these properties and in these neighbourhoods can deliver an investor a property full of style and historical features, but it also means detailed surveys will need to be undertaken. Historical buildings bring with them their own unique challenges. Listed buildings for example, may bring with them certain obligations to maintain the property to certain standards, or within certain parameters. Further to this, investors will need to consider any local planning restrictions or listings which may impact future plans for the property.

On the other side of the equation, investors should also remember that London is an incredibly dynamic and fluid city, with a skyline that is constantly growing. Investors need to consider the impact of potential future developments upon their property. Will the view of the river that can be enjoyed today, be a view of the back of another tower tomorrow?

While it’s hard to keep track, recent reports suggest in excess of 400 skyscrapers are currently being planned across London4. Investors need to find out how many, if any, of these will be being constructed in their neighbourhood and consider how comfortable they are with that.

Beating the competition?

So, how can investors beat the competition to find the right property, make the right offer and then ensure that the bricks and mortar they are investing in is built on solid foundations? Both foreign and domestic property investors are increasingly turning to buying agents to help them negotiate the challenges between them and their perfect investment.

Buying agents can save an investor time and money by ensuring they find the best deals and by bringing local, specialised expertise into the search and acquisition process.

Henry Sherwood, CEO of the Buying Agents says, “London is at present one of the world’s great property hotspots alongside other great global cities such as New York, Paris and Singapore. It is an exciting place for any investor, whether the individual looking to build a successful property rental business in one of the world’s most in-demand cities, or the family looking for a convenient home close to the offices of the Square Mile.

“The very things that make London such an attractive proposition for would-be investors however, also ensure that investing in the city can be a huge challenge. Not only do investors need to negotiate the fierce competition in the market, they also need to consider the neighbourhood they are investing in, the historical fabric of the city and the impact of future growth.

“It is imperative that investors also find the right professionals to manage their investment, the surveyors and lawyers, even the choice of removal firm needs to be considered carefully! This is where a buying agent can save an investor time, money and a great deal of stress. The detailed knowledge of, and love for, London’s property market which an agent can bring to the table is priceless and a must for anybody thinking of making a serious investment into the capital.”

The Buying Agents, based in London, is an award winning property search and acquisition company covering London, the UK and popular destinations in Europe. It provides a personal one to one service to home buyers and investors, active in the prime property market for nearly 15 years with a focus on London but also covering other exclusive parts of the UK, France and Monaco. With a wide range of properties available (which you won’t find in the estate agent windows), The Buying Agents offers a full, bespoke service, taking investors from initial searches, to managing the move, exchanging contracts and opening the door to London property.

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For more information on The Buying Agents please visit http://www.thebuyingagents.com/

To arrange an interview or comment from Henry Sherwood, CEO, The Buying Agents, please contact Liam Thompson at lthompson@sks-london.co.uk , http://sks-of-london.com, or on +44 (0) 20 3290 6001

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References:

1. http://www.savills.co.uk/blog/article/212156/commercial-property/asian-money-keeps-pouring-into-london.aspx
2. http://www.telegraph.co.uk/business/2016/10/06/foreign-investors-race-to-snap-up-london-commercial-property-aft/
3. https://www.ft.com/content/e3717408-f2a3-11e6-95ee-f14e55513608
4. http://www.telegraph.co.uk/business/2016/03/07/what-londons-future-skyline-will-look-like—all-436-skyscrapers/

Looking to purchase a Yacht or Boat?

Looking to purchase a Yacht or Boat?

Buying boats is a complex business, but with the right advice you won’t be left all at sea.

Purchasing your first yacht, or upgrading to your next one, is a significant investment decision. And while the perks of a yacht owning lifestyle are many, it is important to understand and deal with any challenges involved.

The first thing you’ll need to consider is finance. What is your budget? You need to set a budget that is realistic for both your aspirations and your pocket. Take into account buying costs and depreciation. Most people understand that once you have driven a new car off the forecourt, the vehicle becomes immediately second hand and loses value. The same principle applies to purchasing a new yacht. Although the depreciation won’t necessarily be as dramatic as with a new car, it is certainly a factor that needs to be considered.

With finance secured, then comes the second challenge – finding the yacht that works for you and your budget! The yacht market is a truly global one and you could find yourself working with buyers and sellers all over the world in what is often a fast moving environment.

Your search will also need to be informed by questions about how you intend to use your yacht. This will determine the specifics you need – everything from engine power, to space and size, to what finishes you would like to see in terms of upholstering and on-board facilities!

So, how to navigate these choppy waters and find the yacht that’s right for you?

Yacht sellers have for a long time employed agents to help them achieve the best possible price for the vendor. Increasingly, buyers are taking the same approach. You need a professional on your side. A well informed and well connected agent can save you time and uncertainty, as well as potentially saving you tens of thousands of pounds (or more) in up-front costs.

At Go Earth we support your aspirations to yacht ownership with a bespoke service that begins with answering your initial questions with a free – no obligation – consultation, through the whole process including arranging transport of your yacht to your chosen marina. Our expert team scans the market to identify the right product for you, including a wide-range of non-advertised yachts, and can provide advice on finance, surveys and basic seamanship. In particular, we can act as your negotiation agent in the all important procurement and purchase process.

So, don't set sail until you've spoken to Go Earth, and ensure that your yacht investment is watertight, and gives you years of pleasure and luxury!

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For more information about Go Earth and its extraordinary services visit https://www.boatsearch.earth/ . To arrange an interview or comment from Martin Berman, Director, please contact Liam Thompson at lthompson@sks-london.co.uk or on +44 (0) 20 3290 6001, or via ​http://sks-of-london.com .

For Go Earth sales enquiries, please register your interest here >> http://bit.ly/2kntRVq

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Writing Credit: Liam Thompson, Sierra Kilo PR & Millionaire Lifestyle Magazine, Feb 17

INVEST SMART INTO UK PROPERTY DEVELOPMENT

Strange days in the investing world at the moment?

Worried about the effect of current global events on your portfolio? Who isn’t?

Many investors are now turning to safer investments to protect themselves from market risk.

Introducing Bastien Jack Ltd., an established UK property developer who can tick all the boxes for you, within individual property developments and also a new offering across multiple UK developments.

Using state of the art property development techniques, Bastien Jack offer you investments centred around established UK property methodologies and assets, and where almost all risk is mitigated for you.

Investment highlights:

* Uncomplicated private investment into a specific development, OR:
* Into a group of developments
* Exclusive JV funding considered
* Fixed investment term to suit (from 1 year)
* Minimum investment £100,000.00 GBP
* Significant returns
* Tax benefits included

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To register your initial interest for your Investor Pack and Due Diligence, please simply complete the form here.

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For more information on Bastien Jack Ltd investments please visit https://www.bastienjack.com.

To arrange an interview or comment from Rick Nicholls, MD, please contact Liam Thompson at lthompson@sks-london.co.uk , http://sks-of-london.com, or on +44 (0) 20 3290 6001.

WHAT DOES BREXIT MEAN TO UK PROPERTY INVESTORS & DEVELOPERS?

A commentary from Rick Nicholls, Managing Director, Bastien Jack Group Ltd, UK property developer.

In short, we have opportunity.

Initial shock at the prospect of leaving the EU sent the markets into decline, but have they not reacted pretty much as anticipated? Never letting a crisis go without opportunity, selling high to force a low, and then buy back? Since then there has been some indication stability is returning to the markets though GBP to USD and Euro are still trading lower. This is a good thing for UK exports, making them more competitive, assisting those companies that rely on export markets to grow. The UK vote for Brexit probably doesn’t mean that the housing market in the UK is about collapse either. While some uncertainty in the short term may reduce house price growth, for the longer-term property investor, this could be a good opportunity for investing.

The foreign property investor has a boost in value-for-money

In the 24 hours after the Brexit vote, the value of sterling fell on foreign exchange markets. Not by as much as predicted but by around 6% against the euro and 8% against the dollar. As I’m writing this, the pound is now worth €1.11. This fall means the European property investor has more sterling to spend.

Demand for property, specifically in London from foreign investors is still likely to increase, interest has been high from China and Asia as their currency exchange has automatically allowed them a discount on current prices. This though is likely to bea short window of opportunity as we see markets recover from the initial shock.

Domestic demand will remain strong

Demand from home buyers and renters probably won’t collapse either.

There is concern that demand for housing will fall in London and the UK. However, parliamentary research produced for the 2015 Parliament put demand at between 232,000 to 300,000 new housing units per year through to 2020. Demand for new homes is exceeding supply by around 150,000 every year. This demand, fed by the number of new households created each year, is unlikely to fall below the level of supply.

 Immigration will probably remain strong

One of the main negotiations the UK and EU will have to discuss is the free movement of people. Despite the ‘Leave’ campaign suggesting a limit to immigration, we now understand there needs to be movement but objective negotiations will have take place. This will form a significant part of the negotiations to leave the EU.

Outside the EU, the Prime Minister’s current visit to India has the subject of immigration firmly on the agenda for a post Brexit trade deal.

Fundamentals of the UK Property Market

The uncertainty of the exact outcome of Brexit may cause the property investor a little nervousness, but the fundamentals for UK property remain strong.

In terms of capital growth, there are a number of comparable data choices but the Real House price tracker provides more meaningful guide to house prices and has been adjusted for the effects of inflation over the same period. Results confirm the increases in house prices have risen faster than inflation, and includes the last recession where the fall can be seen as a correction when compared to the overall property performance.

There has been widespread comment as to the likely effects on house prices, with falls of between 5% and 10% for areas outside London, though little evidence can be found to support this so far.

The BTL investor has also seen positive movements since 2001 with the size of private renters beginning to grow again.

Annual rent rises too have accelerated in recent years and these are not limited to London. Bristol and Brighton both enjoyed increases, averaging circa 18% in 2015 compared to the previous year. The insurer Homelet reported similar rises in the North (Newcastle upon Tyne and Edinburgh) with around 16% over the previous year. Ultimately the increases are attributable to what’s happening in their specific area and will be influenced by strong fundamentals. Perhaps Hull can expect some positive growth when it is crowned City of Culture?

Rents in London have continued to rise with greater pace than other areas in the UK but have slowed since 2014, therefore a narrowing of the rent inflation gap between London and the rest of the UK.

Even with the recent policy change for buy-to-let investors paying additional stamp duty, more people have turned to BTL investments perhaps as an alternative to low interest rates, bolstered with the knowledge the pace of house building has not kept up with demand therefore sustaining their investment. At the time of the referendum result, there was speculation the base rate would reduce from 0.5% to 0.25% which did take place in August. The Bank of England indicated they would consider reducing further if the economy worsened, which so far has not been the case. It was also confirmed at the time, they also would add money to support confidence and restrict banks freezing liquidity, if not this would probably cause a further credit crunch and restrict mortgage finance. The governor of the Bank of England, Mark Carney, confirmed the reserve of £250bn can be made available if required.

Carney further commented the substantial capital held and large liquidity gives banks the flexibility to continue to lend to businesses and individuals even during challenging times. This suggests provision and safeguards are in place to maintain current lending to suit demand.

Since the referendum, the markets have rallied well and only recently fallen as investors are perhaps concerned that central banks around the globe are easing up on the monetary policies given the uncertainty of the US election result.

In the UK, mortgage approvals by the main banks increased in September after a 19-month low in August. They were lower than the year before but speaking with our local agents, they suggest it’s down to a lack of supply of new build property rather than purchasing confidence.

There are four main areas for focus as we get to grips with the prospect of the UK outside the EU.

1) Calm – we have some indication this is already with us; the markets do seem to have calmed. This is probably due to all the positions the markets took on ‘Remain’ have now well and truly played out. It’s not over yet though, the volatility is set to continue until Article 50 has been triggered and a new directional plan from the government for the UK to leave is known.

2) Change – Nothing ever stays the same, what works for today may not be right for tomorrow. A pertinent example is Kodak, they tried to ignore new technology hoping it would go away by itself on the basis of it being too expensive, too slow, too complicated etc. It wasn’t and their market changed irreversibly in a relatively short period of time, moving from wet film to digital technology.

3) Opportunity – Leaving the EU does provide opportunity. With price correction, there is opportunity to procure better land deals than prior to the referendum, as there may be fewer developers with available funding. Contractors had full order books and build costs had become very high prior to the referendum. We are aware some development contracts have been cancelled as a result of Brexit. Therefore, there might be more opportunity to reduce build costs as price elasticity plays out. The current volatility will ease. The fact the UK has to build more houses to meet demand won’t change.

Bastien Jack Group Ltd has a strong project pipeline and always procures sites which have strong fundamentals and in areas where people want to live. There is a huge amount of due diligence which goes into every site appraisal including courting many local agents and advisors to confirm local demand and Gross Development Values. Speaking with agents in our pipeline areas, they have confirmed confidence is still strong and enthusiastic house viewings are still going ahead. As long as lending is still being offered and liquidity remains within the economy, there remains a great opportunity for us to progress.

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For more information on Bastien Jack Ltd investments please visit https://www.bastienjack.com.

To arrange an interview or comment from Rick Nicholls, MD, please contact Liam Thompson at lthompson@sks-london.co.uk , http://sks-of-london.com, or on +44 (0) 20 3290 6001.

Private Banking - Alternative Investments

Private Banking - Alternative Investments

Private banking is an industry currently undergoing something of a renaissance. As the balance of economic and geopolitical power between East and West has shifted over recent years, there has been an explosion in demand for private banking services across the Asia Pacific region. The emerging markets of China, Malaysia and elsewhere pushed total global assets managed by the private banking industry in 2015 to $20.3 trillion, up from $18.5 trillion in 2013 and the growth of China into a global power has led to an explosion of wealth within its sphere of influence. Recent analysis by the World Wealth Report¹ for example, reveals that the number of individuals with investible assets worth $1 million plus in the Asia Pacific region increased by 17% in 2013, to 4.3 million people. The total wealth held by this group also increased correspondingly by nearly a fifth, to $14.2 trillion.

This growth in the market for private banking has been further assisted by tighter regulation in the post-crash world. Scrutiny and regulation have forced many mainstream and high-street banks out of investment banking, leaving the field open for more specialist and investment driven banks.

Regardless of these dynamics however, striking the right balance between return and risk remains key in the private banking sector.

Building investments…

In the wake of the 2008 crash, and the age of low interest rates and quantitative easing which it ushered in, property has remained the most attractive investment for those looking for significant returns. The reasons for this are clear. Recent research from Savills² revealed that the total value of property worldwide (currently around $217 trillion) is 36 times more valuable than all the gold ever mined (worth approximately $6tn), 2.3 times the value of outstanding securitised debt ($94tn), and 3.9 times the total value of equities ($55tn). The same report estimated the growth rate of this global asset class to be 1.77%, so there are returns to be made and growth rates in local markets often far exceed this. 

Recent data from MSCI shows that US commercial property funds in 2015 grew a staggering 15.6% according to the PREA/IPD US Quarterly Property Fund Index³. Even more impressive is the fact that investments in US commercial property have seen a cumulative return of 129% over the past six years.

There are downsides to property investment however. Property requires regular maintenance for example and while, on the whole, tenants can be relied upon to not mistreat a property and pay the rent on time, bad tenants can turn an investment into a full time job. Politics can also weigh large in the minds of property investors and housing and property is for many a significant political issue. This ensures that the market is often the subject to policy interventions, and property investors can need to be aware of the political contexts in which they make their investments. Investors in one development in London, for example, have been singled out in the media as being representative of rising property prices and the political frustrations which follow⁴.

As a result of this kind of rhetoric, rent caps are being considered or implemented in cities including Dublin, New York and Berlin – despite all the evidence against such market intervention.

At the other end of the scale, larger investments through Real Estate Investment Trusts (REITs), while generating decent returns, are not as high yielding as direct investment can be. The fact that these investments are managed by large corporations and investment houses also means that there is often a potential disconnect between returns, and the allocation of those returns to investors. Indeed, a recent report from a research team in Toronto found that, while REITs had the highest net returns amongst a sample of asset classes, investors in REITs saw the lowest allocations – just 0.6% of total asset value⁵.

…and making them work

Despite the politics property investments continue to outperform other asset classes and so remain popular. Looking again at the US for example, we see that commercial property as an asset class has outperformed US bonds (up 4.39% over the period 2011 to 2015), stocks (up 13.45%), corporate bonds (up 4.72%) and commodities (down 10.93%)⁶.

So what’s the best way to maximise returns, while minimising risk?

Rycal Group have developed a niche which is proving to be increasingly popular with investors. The opportunity is centred around the Carlton James Group, an investment portfolio with a focus on the US’s hospitality sector. Over the last five years this portfolio has seen average returns of 17% per annum. With a strategy based upon wide-ranging geographical and market intelligence, Carlton James look also for additional revenue generators – for example taking into account a development’s proximity to highways, malls and economic infrastructure – as well as local economics.

Simon Calton, Co-Founder and CEO of the Carlton James Group, says: “Private banks and their clients define themselves by their willingness to consider alternative investments – finding the opportunities that others miss. Making alternative investments work for clients however requires depth of knowledge and understanding in any given market. A portfolio such as ours is a perfect partner for investors looking for opportunities in the US that others have yet to capitalise on.

“The secret of Carlton James’ success has been the ability to take a 360-degree view of any investment. We recognise that, to a large extent, the residential property market is saturated, and economists from many global cities are talking about local housing bubbles. Property used for hospitality however is a growth market, and will continue to be so in an economy geared ever more towards the service sector.

“Our expertise also extends to considering the local infrastructure around the properties we invest in. How near is closest freeway or shopping centre? What future developments are planned in the local vicinity? These questions and more are key to the long-term success of our portfolio and guide our decision making processes.”

Carlton James is proud to sponsor the Spear’s Private Banker of the Year Award at the Spear’s Wealth Management Awards (WMA) November 1^st at The Dorchester, London, UK.

For more information on the Rycal Group and Carlton James investments please visit http://www.rycalgroup.com/newinvestors. To arrange an interview or comment from Simon Calton, CEO, please contact Liam Thompson at lthompson@sks-london.co.uk , http://sks-of-london.com, or on +44 (0) 7890 315 537.

1.    https://www.worldwealthreport.com/

2.    http://www.savills.co.uk/_news/article/72418/198559-0/1/2016/world-real-estate-accounts-for-60--of-all-mainstream-assets

3.    https://www.msci.com/documents/10199/e667cc74-b4e2-4f72-8d8a-8b88e283b211

4.    https://www.theguardian.com/society/2016/may/24/revealed-foreign-buyers-own-two-thirds-of-tower-st-george-wharf-london

5.    http://www.pionline.com/article/20160627/PRINT/160629891/reit-returns-strong-allocations-remain-low-study-finds

6.    https://www.bullionvault.com/guide/gold/Annual-asset-performance-comparison

                                                     

Property Investing – mitigating risk

Since the crash of 2008, property has been the asset of choice for investors looking to make returns. Regardless of stock market turbulence and currency crises, the value of property, and the returns available for investors, have been on an upward trajectory. For everybody from international real estate investors, to retirees investing in buy-to-let as a pension alternative, property has been the goose that lays the golden egg.

A recent report issued by MSCI highlights the potential rewards investors can reap from property investment. Their data shows that US commercial property funds in 2015 grew a staggering 15.6% according to the PREA/IPD US Quarterly Property Fund Index¹. Even more remarkably, investments in US commercial property have seen a cumulative return of 129% over the past six years.

Despite the good news however, there are downsides that need to be considered before investing in property. Property for example requires regular maintenance – and while on the whole tenants can be relied upon to look after your property, and pay the rent on time, bad tenants can be a real headache, turning your investment into a full time job. Recent data from the UK for example, shows that a total of nearly 43,000 tenants had to be evicted from privately rented properties in 2015. And with geopolitical uncertainty such as Brexit and elections in the US, France and Germany on the horizon putting downward pressure on economic performance, these figures have the potential to grow.

Property investors also need to consider legislative interventions. Housing across the western world is a key political issue, the reason being, there isn’t enough of it. As such landlords can often find themselves in the political cross-hairs. Landlords in the UK for example, have seen stamp duty increased on buy-to-let purchases, as well as new limitations on the amount of tax relief which can be claimed against rental income and the upkeep of rented property. Likewise, rent caps are becoming increasingly popular in cities across the world including Dublin, New York and Berlin. The new mayor of London has also recently floated the idea of limiting the rent which can be charged on privately rented property.

At the other end of the scale are larger investments, such as Real Estate Investment Trusts (REITs), which, while generating decent returns, are not as high yielding as direct investment in the private rented sector can be. The fact that these investments are managed by large corporations and investment houses also means that there is often a potential disconnect between returns and the allocation of those returns to investors. Indeed, a recent report from a research team in Toronto found that, while REITs had the highest net returns amongst a sample of asset classes, investors in REITs saw the lowest allocations – just 0.6% of total asset value².

Is property worth still it?

There is no doubt that property investments continue to outperform other investments. When we look at US commercial property for example, we see it has outperformed US bonds (up 4.39% over the period 2011 to 2015), stocks (up 13.45%), corporate bonds (up 4.72%) and commodities (down 10.93%)³. Market fundamentals would indicate that this situation is unlikely to change any time soon.

Given the concerns outlined above however, is property still worth it? Set against bad tenants and political scapegoating, the returns available on property may begin to look rather less impressive.
The question is, is there a way to ‘have your cake and eat it’ and enjoy the returns available on property investments but with less of the potential risks?

A novel approach

One opportunity to do so are the investments from the Rycal Group, offering entry to the Carlton James fund which has an investment portfolio focused on the hospitality sector in the US. Carlton James has been investing in this market for a while now, delivering returns averaging 17% for the last five years. With a strategy based upon wide-ranging geographical and market intelligence, Carlton James look also for additional Revenue Generators – for example taking into account a development’s proximity to highways, malls and economic infrastructure – as well as local economics.

Simon Calton, CEO of the Carlton James Group and Rycal Group, says: “Property remains an investment of choice for investors around the world, delivering yields which are difficult to achieve elsewhere in the low interest rate era we find ourselves in. Traditional property investments however can be quite demanding and are subject to risks and influences which are completely beyond the control of investors.

“Property investments are typically slower to move than other investments, such as stocks and shares, so exiting a property investment can also be difficult, leaving investors exposed. There are alternatives however, to small scale personal investment – the landlord route, and larger scale, institutionally led investment.
“At Rycal we work to capture the yields which make property investment so appealing, while also mitigating the downside risks. We achieve this by employing wide ranging and detailed intelligence, about everything from the performance of comparable assets, to the proximity of our developments to infrastructure such as roads and railways. We also ensure that detailed exit strategies are in place and ready to be deployed so that, should the worst happen, our clients are protected.”

“With a diverse portfolio of properties and deep investment intelligence, Carlton James offer a genuinely novel approach to property investment, and one we expect to grow in popularity over coming years.”


For more information on the Rycal Group and Carlton James investments please visit http://www.rycalgroup.com/newinvestors. To arrange an interview or comment from Simon Calton, please contact Liam Thompson at lthompson@sks-london.co.uk , on +44 (0) 7890 315 537 or via http://sks-of-london.com.

1. https://www.msci.com/documents/10199/e667cc74-b4e2-4f72-8d8a-8b88e283b211
2. http://www.pionline.com/article/20160627/PRINT/160629891/reit-returns-strong-allocations-remain-low-study-finds
3. https://www.bullionvault.com/guide/gold/Annual-asset-performance-comparison