Words: Ashley Rigg
Published: 23rd October 2008
Industry Millionaire: Kerry Clark talks to Globaledge
Kerry Clark has worked in the property industry since the days of the 1987 stock market crash. Since 1994, she’s run
Tideway Communications, one of the first PR agencies specialising in helping overseas property companies secure press coverage in the UK and Ireland. Her clients include developers in
Canada,
USA,
Brazil,
Portugal and
Morocco.
To help our readers come up with ideas for future projects, we offered Kerry £25k, £100k and £1 million of hypothetical Globaledge money to invest anywhere in the world.
Ashley Rigg: Hi Kerry, thanks for taking the time to talk to me today. How’s business?
Kerry Clark: It’s good. Agents seem to be suffering terribly but fortunately most of our developer clients are still spending money.
AR: Good to hear. Here’s £25k. How do you fancy spending it?
KC: That’s very kind of you! Am I allowed to leverage it? I need a bit more money for what I have in mind.
AR: Sure, within reason.
KC: Great. I’m going to go for Poznan in
Poland. It’s a beautiful place with a strong domestic market. It’s Poland’s 5th biggest city and 4th biggest industrial centre and it’s a popular university town with an international trade fair. Property prices are growing faster there than anywhere else in Poland.
AR: Why Poland in particular?
KC: Property prices grew around 11% last year and they are forecast to do the same in 2008. There’s lots of money coming in from Polish nationals returning and sending money home from abroad. It’s been relatively isolated from the credit crunch and I’d only buy in places with a strong local market.
AR: What could you get for the money?
KC: For £75k you could get a one-bed flat in the centre, around 60 square metres. The building standards are excellent. It’s not like the stereotype of Soviet housing estates, there are many professional developers building high-quality, contemporary-styled apartments.
AR: What’s the average loan to value in Poland?
KC: The average is around 70%, so it’s easily within your £25k limit!
AR: Good! We’re very strict here with our fictional money. Let’s go mad and take it up to £100k. Where do you fancy investing it?
KC: I know it’s a popular answer but it has to be
Florida. I’d look to buy a property at auction. The auctions are different to the UK. You can buy new-build, pristine, furnished homes with builder guarantees for up to half price. There are often no minimums or reserves either.
AR: Where would you buy?
KC: Well, I watched one auction recently online and many condos in Naples near Orlando sold at auction for US $200,000 (£123,000), half the price they were six months ago. The cheapest went for $167,000 (£103,000). That’s within my budget. They were brand new, three-bed apartments with a shared pool on a great development sold through the British Homes Group. If I could leverage my £100,000, you can get $2 million (£1.23 million) new homes for £400,000 at auction at the moment! This Florida-based, UK-staffed company has all the right connections with the UK and so mortgages are easier for Brits than their US counterparts.
AR: Are there any other parts of Florida that’s you’d consider?
KC: Kissimmee, just south of Orlando, will always be a favourite for those coming to enjoy the famous family attractions. It is close to the airport, with beautiful countryside and all amenities. It really is a luxury lifestyle and you can get it on the cheap at the moment.
AR: What can you get for your money?
KC: You can get a four-bed detached villa with swimming pool of around 2,000 sq ft for about $175,000 (£108,000). Just one of many amazing bargains!
AR: Thanks Kerry. Let’s take it up to a million. Money’s no object. Where would you buy?
KC: With that kind of money, I’d want the lifestyle as well as the investment potential. It would have to be
Brazil. Let’s see, I’d have to buy outright as you can’t get mortgages currently. I’d probably buy three apartments in Sao Paulo.
AR: How much would that set you back?
KC: I’d go for something aimed at the middle market, for white-collar workers. You can get one-bedroom studios in the business district for around £35k each with rental yields of around 10%.
AR: Three properties for just over £100k. Sounds like a bargain.
KC: It is but I think I’m going to have to go upmarket a bit to spend the rest of the money. Right… I’ll have two two-bedroom apartments with a side view of Ipanema beach in Rio. It’s a great location with year-round demand and plenty of holiday letting potential. You could get them for around £250k each.
AR: I stayed there a few years back, didn’t have a view though. How about the northeast of the country?
KC: I’d certainly look at Salvador. I think there is a real shortage of suburban housing for the middle classes there. I’d buy land overlooking the sea just out of town. You can get around 1,000 square metres of land with planning permission for £50k each – I’ll take three of those! But I’d have to build the house on each plot to really get the value. So that’s probably where my last £400,000 would go. Cash is king in Brazil still, which is why it is less affected by the credit crunch than most of the rest of the world.
AR: Anywhere else in Brazil you’d buy?
KC: I could easily spend the money in the state of Alagoas, which has even cheaper land but is earmarked to be the next six-star destination.
AR: Isn’t putting all the money in Brazil a bit risky?
KC: If I was looking at it from purely an investment perspective, I’d look to diversify the risk but hey, I’m a hypothetical millionaire! And anyway, I think it’s difficult to go wrong in Brazil in the longer term. It hasn’t suffered as much from the credit crunch as the rest of the world as there isn’t a mortgage market. As the market matures it will be possible to release the equity in the investments and capital growth should be good as local demand increases. Brazil has superb natural resources and so the Tourist Board of Brazil is due to spend $1.8 billion (£1.1. billion) on infrastructure and promotion over the next few years, which is bound to increase tourism and holiday home demand.
AR: Thanks Kerry. You’ve sold me on Brazil. Great talking to you.
KC: Pleasure, see you at OPP Live.
Would you like to be an industry millionaire?
Do you have a good knowledge of a particular country or region? Could you point overseas agents and developers in the right direction when looking for partners and projects? If you’d like to participate, please contact us.
About Tideway Communications
Tideway Communications is the UK's longest-established overseas property public relations specialist. Tideway has been providing bespoke marketing and media relations services exclusively to overseas residential property clients since 1995. Tideway prides itself on its superb relationships with the most influential journalists across the online and traditional heavyweight media.