Quality Speaks For Itself

Q Business Park Launch in Cyprus

Add comment November 25th, 2008

Angelos Angelopoulos has re-done the animation for the Q Business Park in Larnaca, Cyprus. This follows the successful launch of the project in October. I think you will agree it really is going to be a spectacular building which I am sure will attract visitors, art lovers and photographers from around the world. It will also be the tallest building in Cyprus!……

Get the Flash Player to see this player.

UK Buy to Let Financing still available

Add comment November 21st, 2008

There is a common view that the Buy to Let market in the UK has died and that the principle reason for this is a lack of appetite amongst banks to provide mortgage finance. Whilst it is correct that a number of banks have withdrawn from the market, Mortgage Express, who were one of the largest providers have withdrawn from this market completely, there are still several lenders that are active in the market.

Rates may be slightly higher and Loan to Values (LTV) may be slightly lower but for deals that are well priced financing is still available. If you assume finance of 65-70% and an interest rate of 6.5%-7% you will not be disappointed.

Whilst the figures above may not at first seem appealing, as Dipen has noted in his blog yesterday this my be a once in a generation opportunity to acquire capital assets at sensible prices thereby allowing any acquisition to be cash positive even at current interest rates. The finance available at present should be seen as “bridging finance” until finance markets return to more normal levels and when looked at in this way the investment decisions that you make now will start to look very astute.

Opportunity in the UK?

Add comment November 20th, 2008

Opportunity in the UK?

The cyclical nature of investing has never been better highlighted than the conditions that are prevalent in the world today. At our launch in February, we highlighted the overheating in the UK market in our document ‘Property Investment – The Facts and The QIS Approach’ and stressed that caution was the keyword for the UK. We predicted that a major fall resulting in negative growth was likely, although the speed and size of the fall has surprised us all. However, the key point from our document was that professional and long term investors should focus on:

1) Pursue an Investment Strategy and do not be deterred by sentiment. Rely on Fact.
2) Investing is for the long term.
3) All markets are Cyclical so focus on the bigger picture and not just the short term snapshot.
4) Never ignore Change.

So what are the facts for the UK? Well as we all know, liquidity in mortgage markets and particularly the Buy to Let market has dried up, deterring buyers and forcing sellers to delay their moves or substantially reduce their asking prices. The immediate effect of this has seen a dramatic fall in the average house price in the UK with falls of around 16 to 20% being the norm. However, this sense of gloom and panic has created potential opportunities in the new build and secondary market as the double whammy of the virtual shutdown of the mortgage market and housebuilders being perilously close to breaching their banking covenants has forced prices close to a ‘generational’ low in my opinion.

So how do I arrive at this conclusion? Well the macro outlook for property, particularly in the South East, has not materially changed. In fact if anything, it has worsened. There will be a huge undersupply of homes in the future as housebuilders cancel projects in the current climate, resulting in the delay of homes coming online once demand returns from buyers. In fact with the number of new homes coming online in the South East expected to drop by two thirds over the next two years, any perceived overcapacity will quickly disappear and will be followed by a sharp rise in prices as property once again becomes more valuable. The current demand constraints seem to create an oversupply of property and this has lead to us being offered substantial discounts on both new build and secondary market properties within Greater London. These discounts are driven by hosebuilders and owners needing cash rather than profit and are truly creating generational opportunities.

So what next? Well as I said in our newsletter we are focussing on discounts of around 40% on market value and we are seeking projects that create instant equity BUT also are cash positive. By this I mean that we intend for the yields to comfortably cover any financing costs, even at today’s inflated levels. By the way, we have access to BTL financing options and even though the rates are higher than before, these should almost be viewed as medium term bridging facilities, as rates will normalise in the future – remember even this is cyclical! Ash will be talking about this in more detail soon.

As in so many cases, the best time to buy is when all around you are fearful of doing so. It is impossible to call the bottom of the market, but I feel that in terms of the value from bulk deals, we are very near the bottom. There are many people hoovering up property at these current levels and we intend to do the same.

If you would like a copy of our Property Investment report that I refer to above then please email us at information@qis.uk.com.

Disability equality training for our Cypriot partners

Add comment November 3rd, 2008

The fully accessible complex we are building in Larnaca continues at a pace. It’s good to know that our partners in Cyprus, the Quality Group, really are committed to developing not only a superb product but also to making sure that they really do understand the needs of the disabled community. I think it’s great that they have decided to put a large proportion of their staff through a Disability Equality training programme which will be run by Agnes Fletcher (part of our Q Well-being team and a leading proponent of disabled rights around Europe) in early December. For my part is great to see that our partners really believe in what we are trying to achieve. I think it is important that they really understand that a requirement a disabled person has from a building needs to be combined with the correct terminology as well. Well done Quality Group!