Category: Currency Hedge (5)

By John Egan, National Real Estate Investor

The investment signals Buffett’s confidence not only in Store, but also in net lease properties.

When billionaire investor Warren Buffett makes a deal, people take notice.

Such is the case with the recent purchase by Buffett’s conglomerate, Berkshire Hathaway, of a 9.8 percent stake in Scottsdale, Ariz.-based Store Capital Corp., a net lease REIT. The investment—in the form of 18.6 million privately-placed shares of common stock valued at $20.25 apiece—totals $377 million. Berkshire Hathaway is now Store’s third largest shareholder.

The investment signals Buffett’s confidence not only in Store, but also in net lease properties, says Ralph Cram, president and manager of Envoy Net Lease Partners LLC, a real estate finance company specializing in single-tenant, net leased assets. The cash infusion underscores the fact that the triple-net sector has hit bottom and is climbing back, Cram adds.

“We have seen buying activity of individual properties pick up significantly over the past 45 days,” he notes. “I believe that long-term rates falling recently has helped the triple-net market as well. So the worst has passed for now.”

The Buffett deal brings “favorable attention” to the net lease market, according to Michael Knott, managing director with Newport Beach, Calif.-based research firm Green Street Advisors. At Green Street, he tracks Store and competing net lease REITs Realty Income Corp. and National Retail Properties.

Looking solely at Store, Knott says it’s “a value investor haven” for Berkshire Hathaway. Why? He cites three reasons:

  • Buffett’s company bought its stake in Store at just 11x earnings.
  • Store represents “a safe earnings stream” backed by a diversified portfolio of properties operated by a diverse group of tenants.
  • Store’s management team enjoys a lengthy track record of success. This is the team’s third REIT, with the previous two REITs having been sold.

“The deal suggests there is value in Store’s unique platform in a fragmented net lease industry, and in management’s demonstrated history of generating favorable results for shareholders,” Knott says.

According to Knott, Store carefully evaluates and monitors its investments, and produces solid returns by taking “intelligent risks” with its underlying real estate.

On the day Buffett’s investment was announced, a number of publicly-held shopping center and mall REITs benefited from a bounce in their stock prices. So will the Buffett deal have a more sustained ripple effect on those REITs?

Read more…

*This content is brought to you by Sable International, specialists in securing secondary residency and citizenship for South Africans. Sable can help relocate yourself and your family, along with your business to the UK.

By Andrew Rissik*

The new year is a perfect time for South Africans to start planning how they will make use of their discretionary allowances to transfer large sums of money overseas without a tax clearance certificate. If you’re married, or have children over 18, you can move much more than R1 million without a tax clearance certificate in a calendar year.

Understanding your annual discretionary allowance

The single discretionary allowance (SDA) allows a South African (18 years or older) to send R1 million out of South Africa annually. Since various SDA subcategories were eliminated in April 2015 you can now use your allowance for any legal purpose abroad.

This is what SDA allows you to do:

  • Invest or advance R1 million to foreigners and South Africans living abroad, without obtaining a tax clearance certificate
  • Spend some of the R1 million per person on overseas travel, provided that the aggregate spend does not exceed R1 million per year

But how do you transfer R2 million over this period?

It’s quite simple really.

All you need to keep in mind is that every year you are given a discretionary allowance of R1 million. Your partner, if they are a South African citizen, receives the same amount. This means that over 2017 you can together send R2 million. You can choose to send this in one lump sum, or you can choose to stagger the payments over the year.

Not having to obtain a tax clearance certificate means you can transfer these funds with very little admin. The large amount that is permissible under current regulations makes it easier for you to make a serious offshore investment, rather than having to do it in dribs and drabs. But that’s a decision that you can make depending on your circumstances.

Send more than R2 million each year

Parents with children who are over 18 years old can move R1 million offshore under each child’s name without needing to get tax clearance. All you need to do is make sure your child applies, and receives, a South African tax number.

We can do their tax number application to SARS for a nominal fee of R380. Exercising this option can make a huge difference to the amount of money you can send offshore without tax clearance in a calendar year.

You can also apply for further investment allowances that require tax clearance certificates. For more information on these, and other ways of getting your money where you want it to be, pop us an email and we’ll walk you through the various allowances available to you.

Use these allowances while they’re still available

Many analysts are predicting some severe cash outflows from emerging markets following Donald Trump’s victory in the US election earlier this year.

Trump has outlined stimulus packages that could send bond yields higher in the United States. In these cases, volatile emerging currencies, like the Rand, are most at risk.

Add to this the fact that South Africa has had a history of exchange controls and a reversal in our currently liberal offshore allowances could be on the cards.

It’s only in the last decade that these rules were significantly relaxed. Should the government decide that too much money is flowing out of South Africa, it may decide to bring capital controls back into effect.

If you’re thinking about getting money offshore, it’s best to do so while you still can with ease.

We can help you make use of all your discretionary allowances. Give us a call on +27 (0) 21 657 2153 or send us an email saforex@sableinternational.com.

About Zebra REIT

Introducing a new “Asset Class” being Passive Property Investing and Opportunity to Invest in Institutional Quality Commercial Real Estate Backed By Fortune 500 Corporations, Government and other National tenants in the USA.

Our goal for Zebra REIT is to become the global conduit for low risk, quality property investments across international borders for mid-sized institutions, wealth managers, private clients and family offices.

Technology will ultimately drive distribution in real estate (making it more efficient for local and foreign investors to invest globally) and with our proprietary owned technology, we are well positioned in the rapidly growing Real Estate and FinTech investment market space to become one of the first e-REIT funds.

For more information email Bryan Smith invest@ZebraREIT.com

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Introducing a new “Asset Class” being Passive Property Investing and Opportunity to Invest in Institutional Quality Commercial Real Estate Backed By Fortune 500 Corporations, Government and other National tenants in the USA.

Our goal for Zebra REIT is to become the global conduit for low risk, quality property investments across international borders for mid-sized institutions, wealth managers, private clients and family offices.

Technology will ultimately drive distribution in real estate (making it more efficient for local and foreign investors to invest globally) and with our proprietary owned technology, we are well positioned in the rapidly growing Real Estate and FinTech investment market space to become one of the first e-REIT funds.

For more information email Bryan Smith invest@ZebraREIT.com

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Ray Mahlaka | 12 August 2016
It’s no secret that income-chasing South African investors have been fervent backers of offshore property stocks.

The appetite for hard currency earnings has grown in recent years, with the tally of offshore property companies on the JSE’s more-than-R400 billion real estate sector reaching 15.

Investors will soon have three more offshore property companies to choose from, including Polish-focused GTC Group and Echo Polska Properties (EPP), and UK shopping mall developer Hammerson.

Already, offshore exposure in SA’s listed property sector is about 48% (end of June 2016) compared with no offshore exposure ten years ago, the latest figures from Stanlib show. GTC Group, EPP and Hammerson might garner strong support, if the five-year trend of offshore property stocks outperforming SA-focused stocks is anything to go by.

GTC Group – which owns a €1.3 billion (R19 billion) property portfolio of shopping malls and office properties in Poland and other South Eastern Europe regions such as Serbia, Romania, Croatia and Bulgaria – is planning to list on August 18.

The Warsaw Stock Exchange-listed company won’t issue new shares, as it’s embarking on an inward listing. GTC CEO Thomas Kurzmann says the company has been eyeing South Africa, given how institutional investors have been infatuated with Poland in the past two years.

“The listing will enable us to enlarge our shareholder base and give South African investors exposure to Central and Eastern Europe (CEE) and South Eastern Europe (SEE) regions,” Kurzmann tells Moneyweb.

The company has three development projects (two office properties and a shopping mall) and upon completion will add about €1 billion (R14 billion) to its property value. It also owns land for future development.

Echo Polska Properties

EPP, which is 49.9% held by sector heavyweight Redefine Properties, is planning to list in September. The secondary listing of Echo on the JSE’s main board will coincide with its primary listing on the Luxembourg Stock Exchange.

EPP is also looking to diversify its sources of capital with the listing and provide shareholders with access to Poland through its €1.2 billion (R17 billion) portfolio of largely retail properties.

EPP’s CEO Hadley Dean says the company has the capacity to grow its property portfolio to about €2 billion (R29 billion) in the coming years, given its pipeline of properties. Echo has a 70% interest in a shopping mall development and has options to buy ten properties under developments in Polish cities such as Krakow, Wroclaw, Gdansk, Katowice, and Lodz. Poland’s economy is widely considered to be performing better than its European peers; figures by EPP show that its economy grew by 28% between 2007 and 2015.

Hammerson

The third offering to the market will be London Stock Exchange-listed Hammerson, which owns shopping malls and retail parks in the UK, France and Ireland, with a property portfolio valued at £9 billion (R155 billion). The company already enjoys support from South African investors, who hold about 10% of its stock in London.

Says Ian Anderson, chief investment officer at Grindrod Asset Management: “Hammerson’s inward listing makes a lot more sense than some of the other listings we’ve seen in the sector, given the fact it already has a large SA shareholder [base] on its register.”

Hammerson will join the ranks of its UK-focused peers on the JSE, such as Capital & Counties, Capital & Regional and Intu Properties. Given that Hammerson has a market capitalisation of £4.1 billion (R70 billion), it’s likely to be included on the JSE’s Top 40 Index.

Catalyst Fund Managers portfolio manager Zayd Sulaiman says the weakness of the rand has prompted South African investors to increase allocations into offshore property stocks. Given the stellar performance of rand hedge stocks in recent years, Sulaiman advises that investors look at long-term risk-adjusted total returns when judging the investment case of offshore property stocks

 

About Zebra REIT

Our goal is to introduce a “new asset class” being passive real estate investment and an opportunity for US and Foreign investors to invest in institutional quality commercial real estate, underwritten by Fortune 500 companies, Government and other corporate tenants in the United States.

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May 18, 2016 | Ryan Boysen | Bisnow.com

The fundamentals of the national economy and the specifics of the current DC development boom have combined to make this a great time to be in the triple net lease game in DC, according to Calkain Co’s CEO Jonathan Hipp (above on left with NYU’s Dr. Sam Chandon).

He tells us triple net lease deals continue to prosper in all sectors, but he’s noticed investors from all over the country, and sometimes even internationally, are willing to go the extra mile for the right urban retail deal in the right market and pay an extraordinary cap rate. And DC in particular is a very desirable market.

Jon says investors have been attracted to net lease deals lately because they function almost like a fixed income asset, “real estate wrapped in a bond,” as he calls it, but often deliver a higher return. Net lease deals offer investors a way to de-risk their portfolio by switching from active to passive investing, and the recent volatility in the stock markets has made those types of investments particularly attractive, he says.

On top of that, the fundamentals of the national economy continue to make for a strong outlook, with the statistics for new jobs, income growth, labor participation and unemployment claims better now than they were in 2006, according to a summary of remarks delivered by Sam, an economist and the dean of NYU’s Schack Institute of Real Estate, at a recent event hosted by Calkain.

Read full article at Bisnow.com