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Crisis Investing in Europe
Toronto June 2010
SCHEDULE
• Who are Torcana Ltd?
• How is the economic crisis affecting European property markets?
• The UK market and our latest discounted investment
• The German market and property types we target
• Questions
Crisis investing in Europe
Who are Torcana Ltd?
A Dublin, London and Florida based investment specialist
We promote a variety of real estate & energy investments in Germany, USA & UK
No offplan, no tourist rentals
Focus only on cash flow positive, high quality assets with very solid management in place and a clear resale market
Further details and company profile
available on Torcana.com
How is the crisis affecting Europe? (diff pic)
Ireland, Spain, E. Europe, The United Kingdom
• Prices doubled roughly every 5 years for 15 years between 1993-2007
• Construction industry represented unsustainable level of GDP
• Almost every part of society / media became obsessed with property
• Young people under a lot of pressure to get on the property ladder
• Huge numbers of amateur buyers lost money
• Financial institutions have made massive write downs on their loan books
Crisis Investing in Europe
The United KingdomThe United Kingdom
The United Kingdom – Economic Overview
Worlds sixth largest economy with a population of 62 million
The UK has a diverse economy, strong domestic market, stable government and sophisticated financial systems
Service sector makes up 73% of GDP
London is the most visited city in the world by a considerable margin
A combination of the credit crunch, property downturn, demographic trends and dramatic slowdown in housing starts have all lead to serious supply shortages in major urban areas
UK Economic Overview
Torcana knows where these shortages will be most acute and use our contacts in the banking and construction industry to get huge discounts on cash flow positive properties within them
The United Kingdom contd.
• Areas and Types of Properties Available
- First time buyers- 1 – 2 bed properties- Either central or commuter belt
• What you should avoid
- Offplan Properties- Very large properties- Areas with oversupply - Extremely large developments
UK Economic Overview
The United Kingdom – Road to recovery
GDP GROWTH RATE – Gross domestic product increased by 0.3 per cent in the first quarter of 2010.
UK Economic Overview
• 55 one & two bedroom luxury apartments• Just 5 minutes away from the city centre
W4 Wolverhampton(very near Birmingham)
• 15 units have been set aside for Torcana investors• 38% discount off developer list prices
• A selection of 1 and 2 bedrooms ranging from 556sq ft to 606 sq ft
• Prices range from $79,000 - $119,000
• Net yields from 5.7% - 7.3%• 60-65% UK financing available
W4 Wolverhampton(very near Birmingham)
GermanyGermany
German Economy
Worlds 3rd largest economy with a population of 82 million
Out of recession Aug 09, 2010 growth forecast at 1.4%
Unemployment 7.5% (Spain 20%, France 10.1%, USA 9.9%)
The hub of the European economy
Safe haven for investors due to economic and asset price stability
German Property Market
No property “bubble” in recent years means no “bust” in 2009-10.
German residential and commercial rents are up to 20% -50% lower than in other leading economies .... But yields are the same
€100,000 in June 2009 cost $142,000 (USD)
Commercial property transaction volumes in Q1 2010 up 175%
Strong banking sector
€100,000 in June 2010 costs $122,000 (USD)
German Deals
We favour multi-tenanted properties with strong leases in mature areas
Our target commercial tenants are the small and medium sized family/private businesses that are the heart of the German economy.
We target established assets rather than new build. Existing properties are available at 50% - 80% of the build cost of a similar property
German Deals
These businesses (and half of all Germans) prefer to rent
The preferred investment period is 5-7 years to take advantage of renewal of leases
The properties pay their way each year after all costs and payment of full interest and capital to the bank
Investing in Europe
What Next?
Come and talk to me
Collect some handouts and detailed brochures
Register your interest and receive detailed project information
Many thanks for listening...
Colin Murphy
Managing Director Torcana Ltd
Come back at 4.50pm to hear more detail on my “Top three cash flow positive investments”