Where in the World Can You Get a ROI Potential of 8% Plus These Days?

Main Photo: One of the many top five-star hotels at Cape Town’s V&A Waterfront

Date: February 2021

Location: South Africa

Name: PPI – Portfolio Property Investments

Who They: Portfolio Property Investments™ (PPI) is a South African-based real estate and property brokerage company that specialises in the Sales, Lettings and Full Management of Residential, Commercial and Industrial property in South Africa and abroad, that THPT has recently partnered with.

THPT: During an interview with them we asked how can they offer such return potential…8% plus!

PPI: We want to inform UK and other European investors of the attractive investment potential of South African properties; primarily commercial and industrial, which can include hotels. For UK and other European based investors, it is becoming increasingly challenging to find any meaningful yield or investment return in local markets. By way of illustration, here’s the 10-Year Gov’t Yields for select European countries; absolutely astonishing!!

Investors are increasingly taking more speculative (risky) investment exposures in their portfolios in order to try and eke out some return. Most analysts are in agreement that they are perhaps not being adequately rewarded for the high(er) levels of risk they are taking. Here is a topical FT article which discusses the risks of the current low-yielding, high yield debt (i.e. speculative grade or junk bonds*) market:

The dangers of today’s low-yielding, high-yield market | Financial Times

*By way of comparison, corporate junk bonds now offer comparable returns to what US Treasuries were offering two years ago!!

It is much the same for many other ‘traditional’ investments and asset classes in Europe/UK and the US. We, at PPI are looking to entice UK and other European investor money (hoteliers, HNWI’s, institutions etc.) into the South African property market.

So What Would PPI Do: We would be targeting a net yield of 8-14% for the selected properties, and indeed for our portfolio property fund… more below

THPT: So funding for folks looking to buy hotels in SA? what range?

PPI: Yes, primarily hotels, but there will also be scope for other select commercial and industrial properties. With the GBP-ZAR FX rate at approx 20 to 1, the potential investment size of the hotels/properties is typically in the £5m to £50m+ (R100m to R1bn+) range.

We are also well-placed to source select/prime hotels and other properties of larger investment sizes of £100m+ (R2bn+) for direct investment (either as a single entity or as a consortium) by non-SA investors. We can speak to your clients about this further.

Furthermore, we are looking to secure funding from non-SA and SA investors in order to manage a dedicated property portfolio fund of underlying properties. Our targeted minimum funding size would be R200m (c. £10m) at launch for the fund. We would be targeting minimum (initial) individual allocations to the fund of £250k. As with most investing, the hardest part is securing the initial investment size; we are confident the rest would ramp up nicely – and sharpishly!! in size from there.

THPT….So Who Are PPI: Based in Umhlanga, 14 km north of Durban on South Africa’s KZN coastline, PPI offers our clients a solid and effective platform from which we market and source all their property requirements. We achieve this through an integrated network of buyers and sellers, developers and other property-related institutions. This “One Stop” Boutique type service offering is what we believe differentiates us from our competitors.

Our History: Founded in 2005 by Bradley Hancock and Yianni Pavlou, PPI has grown from a fledgling local residential brokerage into an established and respected player in the Residential, Commercial and Industrial property sectors. Our client base is as diverse as our service offering and includes but is not limited to International, Pan-African, National and Local companies, as well as JSE-listed Property Funds, Private Individuals and Portfolio Landlords.

Our growth has come about through a successful track record in maintaining the highest standards throughout our service offerings. This is highlighted by the fact that most of our business has come about through repeat customers and satisfied customer referrals. Besides this our intensive marketing initiatives and brand-building exercises further contribute to our ever-expanding client base.

Values: At PPI, we believe that due to the pressures we face in today’s challenging environment, that time is the most precious commodity. For this reason, we believe in building partnerships and longstanding relationships with our clients where we fully understand and service all their property requirements thereby saving them time spent with multiple property practitioners. This is encapsulated in our motto: Your Partners in Property.

Plans for the future: Going forward, we will continue the company culture of Honesty, Integrity and to always do what is best for our clients. This, coupled with our professional and motivated team of property brokers, places us in an enviable position of solid long-term success. We are unwavering in our commitment to maintain the highest standards possible within the industry whilst being your preferred partner in property.

Next Steps: Please contact us through THPT if you would like to know more.

THPT Comment: MISREPRESENTATION ACT 1967. This information is provided as a general guide and is not intended to be constructed as a statement of fact upon which interested parties can rely. All interested parties should make their enquiries by inspection or otherwise. Neither The Hotel Property Team (trading name of Impetus Marketing 2006 Ltd) nor any person in our employment has the authority to make, give or imply any representation or warranty whatsoever relating to the premises referred to in these particulars. These details do not constitute any offer, contract or any part thereof and all negotiations relating to the premises should be conducted through THPT.

First Seen: An interview with the two principals of the business, by THPT’s Dev Anand

The Hotel Property Team (THPT) is a small group of highly experienced business professionals. Between us, we provide a range of skills and experience which is directly relevant to those involved in the hotel property market.

For more information – Visit www.thpt.co.uk or email info@thpt.co.uk.