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UK investors flock to emerging markets

14th December 2007 | back to article listings BACK    print this article PRINT

In the midst of the credit crunch, investors in property may wonder where the best returns are to be had. Short-term gains are no longer freely available in Britain or Spain, where market corrections have set in and experts agree the way to make good money is in long-term buy-to-let. Those looking for emerging markets are thus looking farther afield.

This trend has been confirmed by international money exchange firm HiFX. Marketing director Mark Bodega, who stated that: "We've seen demand for our currency services increase by 15 to 20 per cent this year. But, we expect that to probably change in the first quarter of next year."

But while currencies like the US dollar are presently weak and not so attractive in the wake of the sub-prime crisis, what was actually happening most was the emergence of a "different type of client". He said this was not happening in places such as France, which had a "stable" market, but was being represented by the new types of investment increasingly taking place.

Noting that the UK situation has seen a rise in the number of overseas investors, Mr Bodega added: "More and more investors are now looking overseas to the emerging markets and hotspots."

There is a good rationale for this. As explained this week by Marco Pietropoli, director of London-based RMDS, which sells property in Cape Verde, locations such as the islands have a partial immunity to the global credit crunch because their potential is only just being tapped. Mr Pietropoli explained that the market was being driven by infrastructure improvement, with new airports and air routes being one example, adding: "The continued investment in infrastructure is facilitating the property expansion and it is being helped by tax breaks being given to developers."

Other emerging markets include India, whose economy was tipped by Goldman Sachs eight years ago to be one of the top three economies in the world by 2035. That was based on a growth rate per annum not exceeding 6.1 per cent. On the current 9.4 per cent it will be there by 2012.

As for the hotspots, some of these will still exist even in established markets, much discussed candidates being Valencia (home to a new marina after the 2007 Americas Cup and the European Formula One Grand Prix 2008-14) and northern France in the wake of the new faster Eurostar service.

Whichever new markets and hotspots investors look to, Mr Bodega advised that the same rules applied: To make a success of the venture, good homework, due diligence and above all the use of independent advice before committing any money were all of high importance.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/3921.html. Alternatively, please see our full press release archive.

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