By Lisa Bathurst
With many South Africans looking to diversify their property portfolios, an increasing number are going 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 Seaboard
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 capital 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 bedroomed home in Bryanston on a large stand up to 2000m. Choose from an established cluster or new modern development 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-watering capital growth potential over the next 5 years. Here you can purchase a premium riverside apartment in a brand new development, offering the convenience of city living from a stylish waterfront location. Apartments feature opulent interiors, 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 unrivalled 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 passports 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 townhouses 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 traditional 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.