Put your spare cash in US, UK properties


Monday, July 4, 2011

imageINVESTORS who have some cash to spare should put their money in the property market in both the United States and the United Kingdom, according to representatives of a foreign investment property exhibition held over the weekend at the Centrepoint Hotel in Gadong.

Organised by Brunei-based Pan Villa Properties with Elix Realty Pte Ltd from Singapore, the exhibition focused on two property investment options in Florida in the US and Liverpool, UK.

Pan Villa Properties representative Nick Tay said that even though US properties are quite new to Bruneians compared to UK properties, “it is better to buy now” as the prices are quite competitive.

Steve Teo, key executive officer of Elix Realty, said, the property market in the US has dropped by an average of 60 per cent, and that investors who are looking to purchase the property, can expect a capital appreciation that can be “as high as 100 per cent” within the estimated time of three to five years when the US economy starts to pick up.

At the exhibition, 11 units from the Milan Condominiums located in Orlando City, Florida, was available for sale in the Brunei market.

“We call these property ‘opportunity property’, and we had this exhibition in Brunei to see whether the Bruneians will accept to buy overseas property,” Teo said, adding that these units have been proven to be very popular in the Singapore, Malaysia and Hong Kong markets.
Converted to Bruneian Dollars, one unit from the Milan Condominiums would range between $80,000 to $100,000 per condo, with the smallest unit being 659 sq ft and the biggest being 1200 sq ft.

Asked about the response so far from the first day of the exhibition, Teo said that it has been “pretty good”. “It is something I am not expecting, but it turns out quite well,” said Teo who added that the return on investment from this property is a seven per cent nett return. “The most important thing is that we are talking about capital appreciation, because we are expecting the States to bounce back at any time,” he said.

As for the financing of this units, investors who wish to invest in a Milan Condominiums unit would have to place a booking fee of $2,000, and would have to wire $5,000 to the Everest Title Group LLC, whereby within two to three weeks of the transactions, the Title Deed will be presented to the owners.
“All of the financial transactions are in escrow accounts so it is safe, because it means that the seller cannot touch the buyer’s money until the whole process is completed,” said Teo.

In terms of the UK property, Teo explained that this investment would not be focused on capital appreciation, but on rental yield. Located in the heart of Liverpool, the units that are being sold are student accommodations and surrounded by four universities, one of them being the University of Liverpool.

“Many people go to the UK for education, so there is always a demand there for a student apartment,” said Teo, who added that the developers of St Andrews Place, are giving a guarantee return of eight per cent nett for the next three years. Tay also added the developer has a 10-year contract with one of the four universities.

At the moment, there are 10 units available for sale in the Brunei market, costing £48,000, which is an estimated $96,000 flat rate. The units however vary in sizes from 160 sq ft to 200 sq ft. “For a unit like this, each unit can obtain a rental yield of about £300 more or less per month,” he said.
Interviewed via phone yesterday, Tay said that response over the past two days had been very good and there were a few bookings made, although he could not reveal the exact number. Unlike Brunei, he explained, “The US and UK are a free market. So, basically, you are buying a house with your own title deed.”

Source: The Brunei Times