Real Estate Investor Magazine South Africa September 2018 | Page 58

INTERNATIONAL INVESTMENT
How to evaluate
offshore investments
BY LISA BATHURST
W
ith many South Africans looking to diversify their
property portfolios, an increasing number are go-
ing offshore in search of a good rand hedge, global
growth and a plan B should the scare mongering of the media
prove real.
Diversification is a key wealth strategy and one that we
have all heard a lot about. Whilst we should be expanding our
global portfolios, most of us have no idea what we can actually
get overseas with our rands. Thats why Hurst & Wills have
put together a list of comparisons to illustrate just what R5m
will get you both here in SA and in other global cities.
An apartment on Cape Town’s Atlantic Sea-
board
In Sea Point & Green Point, you can pick up a 2 bedroom 2
bathroomed apartment for R5m. With 80sqm of open plan
living areas and possibly a balcony, you can take your pick from
mountain or sea views. The seaboard has seen impressive cap-
ital growth over the last 10 years, and though it has settled
for now, the Atlantic Seaboard is a pocket of SA that remains
resilient. Yields are tricky due to saturated rental market and
pricy borrowing, though short term rentals can offer excellent
returns of above 6% if you purchase in an Airbnb compliant
building.
A House in Johannesburg
Here, for your R5m, you can find a contemporary three bed-
roomed home in Bryanston on a large stand up to 2000m.
Choose from an established cluster or new modern develop-
ment in a safe secure complex, with spacious open-plan living,
staff accommodation, a swimming pool, double garage and a
decent garden as standard. On longer term rentals, expect to
see yields on average of 7%, assuming no bond. Bonding the
property will wipe out your returns. Growth in Johannesburg’s
residential market looks limited given the concerns around
crime and consequent semigration, which has resulted in the
slashing of prices and homes being on the market for longer
than usual.
Riverside apartment in Manchester, UK
According to HSBC and JLL, Manchester in the UK is the
best city in the world to invest in this decade, with eye-wa-
tering capital growth potential over the next 5 years. Here you
can purchase a premium riverside apartment in a brand new
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development, offering the convenience of city living from a
stylish waterfront location. Apartments feature opulent interi-
ors, private terraces and trendy communal areas, from R4.5m.
The apartments can be fully managed at a yield of 6% NET
and leveraging within the UK could push these returns even
higher.
3 x student accommodations in the UK
For those of you who thought the UK was out of reach for the
average SA investor, think again. For R5m, you can purchase
a small portfolio (3 units actually) in the UKs most resilient
property asset class - Purpose Built Student Accommodation
(PBSA). Buy into an excellent luxury student development
by leading developer with 27 years experience.  Located in
thriving university cities, coming fully furnished and managed,
these hands-off projects are perfectly positioned to offer un-
rivalled investor returns, boasting guarantees of 8% NET for
5 years.
A townhouse on a golf resort in Portugal
Portugal has been a popular destination for south africans of
late, looking to secure a Golden Visa and eventual EU pass-
ports for themselves and their families. For R5m, you can
purchase a luxury townhouse on the exclusive Praia D’El Rey
Golf & Beach Resort, home to golden beaches, a world-class
golf course and long days of plentiful sunshine. The townhous-
es comprise of 3 bedrooms and bathrooms, offering balconies,
communal gardens, swimming pools and access to the resorts
communal facilities and golf club. The units can be lived in, or
rented out, to holiday lets, offering good returns fo up to 4%,
and tax benefits.
Luxury city centre apartment in Old Porto
For R5m you can purchase a stunning apartment featuring tra-
ditional architecture fused with modern luxury finishes on the
cobbled streets of central Porto. Many apartments here are a
result of the rehabilitation of existing building built according
to the highest standards of comfort, quality and security, and
have become a favourite for locals and visitors. `Short term
yields in porto can reach 9%, and the capital growth expected
in this region is promising, as the government continues to
improve infrastructure and the international visitors continue
to rate it one of the best cities ti visit in Europe.