48 | BMV INVESTOR FOCUS
Investor activity
- Within a month of its launch in December last year, the BMV Florida Property Network received over 1,000 enquiries and made 25 sales reservations for tenanted distressed property. The Network, which includes agents Armarium, Property Prophets, and Global Property Partners, comprises agents with databases in the UK, Ireland, Scandinavia, Canada, Italy and China.
- A US fund targeting distressed property in American cities raised 45% of its $100 million ex- penditure from Gulf investors. US-based property fi rm Tate Capital Real Estate Solutions partnered with LRIM Investment Management, a private equity research fi rm in Dubai, to target investors in the region.
- In its latest investor survey conducted by Debtwire in association with Cliff ord Chance and Rothschild, 84% said opportunities in real estate
active but were always specialised buyers in niche markets; and the English are still the most important overseas property buyers in Europe. The volume of sales is down hugely but they’re still the most active group.” All of these investor groups are
competing with domestic distressed buyers, and cash tends to tip the balance. “There isn’t really fi nancing in this market but foreign buyers tend to have cash, and this gives them the edge over local buyers who need fi nance,” says Jenny Huertas, international sales director at Condo Vultures, commenting on Florida. It’s a slightly diff erent story in
Cyprus, where a 24% y-o-y overall rise in sales in January was attributed to distressed sales in the domestic market. Cypriot developer Top Properties is seeing most interest from UK and Russian buyers in the 30- 40% discounts off ered on its fl agship resort complex in Paphos, but locals represent a signifi cant proportion of sales, according to managing director Tassos Tremetoushiotis, who says “local banks are currently off ering attractive terms and conditions to locals, in particular for fi rst time buyers.” Expat Cypriots are among the
many nationalities competing for deals in London. Portal PropertyEarth. net revealed at the end of last year that it was seeing more enquiries for UK property from US, German and French investors – and an
infl ux of Spanish expats returning to take advantage of the weaker pound. “British chain-free property is attracting attention from all over the world, due to the low price of the property and the weak pound,” said PropertyEarth’s managing director, Dominic Toller, who added that it had seen more interest from large investment funds and high net worth international buyers who want to purchase entire blocks of fl ats.
More funds, but are they buying?
Toller isn’t the only one who has noticed the increased fund activity. “We have seen a lot of interest from funds, the latest being from Greece looking to buy in the London market,” says Dominic Farrell, owner of Distressed Assets, which is about to launch its own UK fund. “London is a ‘country’ in its own right in terms of property and the weakness of Sterling is attracting overseas investors.” Steve Dawkins, owner of Own
Property Worldwide, an agent specialising in BMV that is building an international network of sub-agents, is also seeing more interest in London. “We are speaking to funds on a weekly basis and to be honest areas such as Marbella and Orlando are not being acquired at the moment; but we are working closely with Middle Eastern
www.opp.org.uk | APRIL 2010
would increase in 2010. According to the latest Distressed Debt Outlook, 58% said China was the most popular country for investment, followed by Indonesia and Australia with 36% each.
- A fund launched by international broker group Prodigy Network began buying stock in Miami and New York at discounts of 25%-65% from peak last year. With plans to sell $500 million of the US distressed stock within 90 days of purchasing them, early sales came from Mexico, Spain and Italy.
- In November last year, DualInvest planned to raise £4million from UK investors with SIPPs to buy 65% stakes in residential portfolios, leaving the housebuilder or corporate landlord with a 35% stake, responsibility for letting and manag- ing the property, and an obligation to pay two years’ rent (13.5%) to the investors up front.
and Asian Institutions to source good value residential and commercial property in Central London, and this market is stronger than ever.” While there has been fund activity
in the US, it appears to be for more commercial real estate according to da Silva. “Funds are still being raised but they’re very geographically focused and limited. For example US funds are sticking to US purchases and European funds to Europe. It’s the larger vulture
There isn’t really fi nancing in this market but foreign buyers tend to have cash, and this gives them the edge over local buyers who need fi nance.
Jenny Huertas, Condo Vultures
funds that are most active,” he confi des. Huertas concurs, but adds: “We’ve
dealt with a big group of investors from Canada who came down with an appetite for commercial but have now seen an opportunity in residential. There are some funds looking but they tend to be very conservative.” “The only people who are buying
multiple units are Asian investors, either from places like China or Singapore or Asians living in Canada,” adds Rayman. “They’re coming from strong property markets where they can sell at the top of the market and invest at dirt cheap prices in Florida. In fact the best investors we met at
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