London is considered an international safe haven - a place where the wealthy from across the globe can invest their money. However, it seems that Britons are the only ones not willing to flash their cash in the capital, with the super rich preferring the US. Stonehage Investment Partners told the Financial Times that the residential and commercial property market over the pond is now the subject of much real estate investment interest.
John Veale, chief investment officer at Stonehage, explained that the country is experiencing a boom akin to London's, with US residential property now accounting for between eight to ten of a typical client's portfolio. This is in sharp contrast to previous years when the amount of US stock on the books of British investors was close to zero. Nonetheless, property in the country is proving to be incredibly lucrative, with Mr Veale claiming many of his clients are achieving returns of 40 per cent in the residential sector during 2012.
It is expected that this year a second client allocation will deliver ten to 12 per cent returns per annum, concentrating on residential mortgages from regional US banks and commercial properties in Las Vegas and Illinois, the Financial Times reported. It isn't just Stonehage that has noticed a move towards the US from British investors either. Sam Instone, director of London-based AES International, told the newspaper that the UK's wealthiest are looking overseas.
“We are finding that places such as Florida, in addition to countries such as Canada, South Africa and Bulgaria, have been particularly popular, offering attractive rental opportunities for clients and delivering income and growth,” he said.
Commercial property is also performing well for investors, with the National Council of Real Estate Investment Fiduciaries noting positive results across the board during Q4 2012. During the last three months of the year, there was a 2.54 per cent increase in returns, made up of a 1.41 per cent income return and a 1.13 per cent capital appreciation return. This is also a slight gain on Q3, when a 2.34 return was recorded.
- Wednesday 13 February 2013