‘Real estate can prosper in a slow growth world’
Andrew Milligan, head of global strategy at Standard Life Investments, told guests at a property seminar that the sector can defy a wider slowdown in the economy.
Noting that China was the biggest influence on the direction of the world economy, he said real estate continued to offer some attractive returns.
“This is a very slow growth world,” he said. “But property can perform well in a slow growth world.”
Property achieved returns of 18% last year and 14% this year. “These are very good numbers,” he said.
Speaking to 70 guests at a seminar at the Quartermile offices of Morton Fraser, Mr Milligan said overseas investors were still attracted to Britain because of its stable currency and high yields in a low yield market.
Property professionals heard how one entrepreneur had defied the downturn after the financial crash to build a retail investment company which will be joining the main stock market next year.
David Lockhart (above) will promote New River Retail, launched in 2009, from the Alternative Investment Market into the FTSE 350.
Since its launch it has grown from a market capitalisation of £25 million to £625m with £1 billion of assets, including 29 shopping centres, 19 retail parks and warehouses, and 360 pubs.
Mr Lockhart, who in the early 1990s launched, built and then sold Halladale Group in 2007, said the company had chosen assets with a strong yield and which offered a destination element.
“Retail is as much about leisure as about selling stuff,” he said, adding that the future for shopping streets was to make them more attractive and improve car parking.
He said the rate of online growth was slowing, but the biggest users were bricks and mortar shops combining their stores with click-and-collect systems. Online shoppers also tended to be the more affluent whereas people in poorer areas still wanted to shop locally.
New River owns a number of shopping centres in Scotland – New Kirkgate in Leith – where one of the busiest Lidl stores in the UK plans to expand – the Paisley Piazza; The Avenue, Newton Mearns; Burns Mall, Kilmarnock and La Porte Precinct in Grangemouth.
Photos: Andrew Milligan (top) and David Lockhart (by Terry Murden)