The Sale and Purchase of Property in London

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Why London? 
· All political power is located in London 
· Substantial financial power is located in London 
· Most of the cultural power and heritage is located in London

COMMERCIAL PROPERTY MARKET IN LONDON 
· Size: the commercial market in London is comparable to the size of the market in Paris, and is four times larger than those in Frankfurt, Madrid and Brussels
· Developed 
· The most transparent in Europe 
· A variety of property sizes
· High means of liquidity 
· Reliable 

Developed markets: 
· Early retracement
· Transparency 

Risks in emerging markets: 
· Political 
· Economic 
· Monetary

ECONOMIC PROSPECTS
London, as the most internationally-oriented market, is the most attractive for profit from the global economic growth, which became evident since mid-2009.
· In the UK regions, the rental price retracement during the crisis was mild (-10%), but the growth will take longer
· Demand for rental properties outside of London will remain in a state of duress, due to the limitation of government spending. However, the movement of governmental persons and the separation of banks, can continue to provide interesting opportunities

MANAGEMENT OF CAPITAL AND REAL ESTATE 
· Advice for the purchase of property will include a business plan and a budget 
· Management of individuals involved in real estate administration 
· Annual budget comparison with actual revenues and expenditures (VARIANCE ANALYSIS) 
· The appointment of experts, if necessary 
· Property rental agents
· Rent audit consultants
· Maintenance and improvement of real estate 

ADMINISTRATION, ACCOUNTING AND REPORTING 
· Quarterly reports on the ownership and management of real estate 
· Annual audit by an independent auditor 
· Compliance with English tax laws

THE CONCEPT OF REAL ESTATE RATES
In the financial markets, the rate of return denotes a return on an investment, expressed as a percentage, and based on the profits and costs that are associated with the investment.

· Bond rate = coupon / price of the bond 
· Dividend rate = annual dividend per share / share price 
· INITIAL REAL ESTATE RATE - in the UK, it is calculated by dividing the first year's rent by the total project cost (including the costs associated with the acquisition) 
· Costs related to the acquisition = 5.7625% (4% tax + 1% agent fee + 0.5% legal fees + 17.5% VAT on fees) 
· INITIAL REAL ESTATE RATE = rent (1st year) / (net price of property x (100 + 5.7625%)) 

Mechanisms for risk reduction
· An in-depth study and detailed research
· Underwriting - a complete analysis and the testing of different scenarios (downside, base, upside scenarios) 
· Reliable and documented procedures (Shareholders' Agreement, Service Agreement)
· Investor protection and the application of the best established practice
· Creation and subsequent control of the financial model - the budget and forecasts for the project, the company and the fund 

Strategic alignment of positions and interests
· No conflict of interest 
· No fee for the acquisition of real estate 
· Rewards associated with the result (from the net profit) - 20% 
· 20% surcharge on the cost of construction

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INVESTMENT PROJECTS FOR SALE

INCOME FROM PROPERTY INVESTMENT BY 30% More
 
 
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