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Asset appreciation, reasons for it

Central London, income producing retail investments are considered low risk compared to other asset classes, and have the appeal of rental growth and secure long leases. 

Savills’ head of commercial research Mat Oakley said: “In a world of uncertainty investors will swing to an income producing and risk off strategy and property will do well from this with prices rising for these assets. The real opportunity is to create long-term secure income producing assets… We believe this is where the best returns will be.”


We continue to see strong demand from retail occupiers, as tenants pursue well-located premises to launch or expand their businesses. The competitive environment for prime space has pushed up rental values. The overall Consulco portfolio has experienced annualised rental growth at an average of 6% and has no vacant retail units.

The London locations that Consulco focus on are areas which we think will be improved by transport links, regeneration and large scale development, therefore offering greater returns once these improvements are completed.

We also expect to outperform average returns through active asset management. We will seek to improve the financial strength of our tenants, secure a change of use and convert to a higher value, psychically extend properties and reconfigure and refurbish.

Savills has predicted that average total returns on UK property investments are likely to be approximately 5.6% per annum during 2017-2021, but we expect central London retail investment to exceed this level.

The Hermes fund has achieved 30% return on investment over 6 years.

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DISCLAIMER

The information contained in this webpage is provided for general information only and does not constitute a recommendation, offer or invitation to make an investment, nor has it been prepared in connection with any such recommendation, offer or invitation, and is not directed to any person in any jurisdiction where the publication or availability of the information is prohibited. In preparing the information, we have not taken into account your objectives, financial situation or needs. Before making an investment decision, you need to consider whether this information is appropriate to your objectives, financial situation and needs. The information contained herein has been obtained from sources that we believe to be reliable, but its accuracy and completeness are not guaranteed. Any examples shown may be purely hypothetical and have been included for demonstrational purposes only.

The performance, or any particular repayment of capital is not guaranteed. Past performance is not a reliable indicator of future results. Returns linked to currencies may increase or decrease as a result of currency fluctuations. Tax treatments depend on the individual circumstances and may be subject to change in the future.

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