Craig Gibbons' Lifeblog lifeblog://tri.eat.net

16Feb/080

The Crest KL, growth of a property portfolio

It's been a successful last couple of years in London. Since starting at Merrill Lynch and moving on from the days of £200 dinners for kicks, expensive cars for fun and designer suits for nothing, I've wised up at last and started trying to make more of my opportunities. To this end I have added a 3rd property to (what I am now calling) my portfolio.

I've been shopping around for about the last 6 months for a good investment. By now, everybody knows the party is over for the London property market (in fact it's more like the morning after when you come out the club and it's light and you can't get a cab, and it's raining) so I knew I needed to look further afield to invest in something with actual growth potential. At the moment there are several so-called property hotspots in the world, among them Eastern Europe, Brazil, Macau (and indeed China in general), several of the Caribbean Islands, Mongolia and Malaysia. One thing I have learned through the process of looking for a good investment is that if you can see the herd, you're already too late, but for a part-time amateur investor like me, I was never going to be intrepid enough to take the risk on a completely new market so it was all about finding a location which was booming, but still not overpriced. The investment also had to be 'hands-free' (i.e. No more to pay after deposit) and preferably cash-flow positive or at least neutral (i.e. actually returned cash or simply took care of its self). Lastly, there needed to be good let potential and exit strategy, which implied strong local market demand.

Finally, after so many hours reading about different locations, analysing local markets, tax laws, exchange rate trends and rental yields I have found what I believe to be the best investment possible within my budget, a new apartment in Kuala Lumpur, Malaysia. KL is a booming metropolis and Malaysia is really on the up and up with 50% of the population under the age of 27, an urbanisation rate of 10% per annum and a booming IT services industry servicing neighbouring China, it looks set to achieve solid growth over the coming years. It should also be largely protected from the downturns in the current credit crunch given the economy is not dependant on the US consumer, like so much of the rest of the world is. The property is a two bedroom, 77sqm apartment in the heart of KL's Golden Triangle, about 5 minutes away from the Petronas Towers, the world's tallest buildings. Set for completion late 2010, this is definitely a long term investment and anything could happen during that time, but I figure what the hey, one can't be too overly cautious. It's a risk to be sure, but a risk I hope will pay off.

Update 26/05/2010: Initial completion estimates have proven to be overly optimistic. Instead of October this year, the Crest KLCC will now only be complete in the final quarter of 2011.

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