- This topic has 13 replies, 5 voices, and was last updated 18 years, 2 months ago by
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“High yield investments are, by definition, insecure” – certainly depends what one would class as insecure?
In property investment terms, currently a Plc tenant with a 10 years or more lease, with reviews every 5 years and current yield of 6% or more, would be classed as secure, by most private investors and Institutions. -
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“High yield would be higher than 5-6% IMHO” strange then that majority of commercial investments with good covenants are exchanging for 5% to 6% then.
Recent example part of retail park development. Tenants = 3, all Plc. Purchase Cost £87m yield 5.1%
If anyone is looking for yields above 6%, they need not consider Plc covenants or good lease terms.
Obviously the Institution and main stream investors have got it all wrong?
“6% would not be high yield for my bank” is that with a specific client?
Why do banks have to come into the equation. If internally funded, 5-6% is a dream return in the current financial market.The above comments relate to investments in UK.
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I don’t wish to get involved in another Byzantine discussion MG, albeit 5-6% yield is what a bank gives you for certain classes of bonds and its not high yield given that the interest rates by both FED and BoE are at or above 5%.
High yield are normally associated to Milken which gave over two digit annual returns and were known as “junk bonds” back in the eighties due to the low credit rating by S&P and other reputable credit-rating companies.
I’m sure many high street banks offer mainstream products at 5% and call them “high yield” as you point out. Other banks don’t call them or regard them as such.
As I posted, it’s basic economic theory to know that the higher the yield the higher the risk associated to it. That’s why the mathematical concept of “diversification” in an investment portfolio was developed in the fifties by Markowitz so as to reduce the inherent risk and attempt to make the portfolio securer.
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“I don’t wish to get involved in another Byzantine discussion MG” Likewise and you are entitled to your opinion.
You do seem a little obsessed with banks, be it funding or investing. The business world does not start or end at the steps of the “high street banks”, in fact, in UK, for such levels of investments mentioned above, few would be interested or have the authority to discuss.
I will pass your advice on to some of my associates, which includes one of the top 10 property investment companies in UK, and perhaps they and I can learn from the advice. Also, we are now able to advise them tha the top retailer in UK, can possibly be considered not to be as good a covenant as we all believed.
Many thanks for your guidance. -
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The simplest advise investing in property in Spain would be to wait and hold onto your money for 3-5 years. Then buy.
I don’t intend to “teach” anyone anything MG. I’m not obsessed with banks, it’s just that I happen to be a real estate lawyer and I happen to know that prices are going down no matter what the media hype or the government’s statistics say. I see it every day, it’s no big secret.
Investing now in -spanish- property is foolish. That’s why I write of banks and other investments.
I don’t know the UK property market so I won’t give my opinion on matters that I don’t know.
Anyway, my initial post was intended for Steven, nor for you. Don’t take it as something personal. In fact, I hadn’t even read your post below his.
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“The simplest advise investing in property in Spain would be to wait and hold onto your money for 3-5 years. Then buy. ” Even I must agree with that.
“I don’t intend to “teach” anyone anything MG. I’m not obsessed with banks, it’s just that I happen to be a real estate lawyer and I happen to know that prices are going down no matter what the media hype or the government’s statistics say.” That is Spanish property of course, and not commercial?
I see it every day, it’s no big secret.
“I don’t know the UK property market so I won’t give my opinion on matters that I don’t know. ” That is something I do know, hence above I do mention UK.
“Don’t take it as something personal.” Never do and always prepared to learn.
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Thx for the interest and open discussions on my original inquiry.
Some leads have been developed offline and are continuing to rollout.
If there are additional parties who can reply with additional leads, I would be interested in hearing from you.Just for clarification:
High yield in my case refers to an avg. difference of 2% between yield and funding. Investments targeted between 10-20M Euro. Can be stretched either way.
Secure is a matter of definition. Should be relatively secure (long term lease etc.).Cheers,
Steven
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