Building a successful property portfolio

Be clear on what you want to minimise risks and fetch good returnsImage Credit: Supplied

The UAE real estate market is currently attractive and lucrative. Like any other investments, investing in real estate does pose some risks, but you can achieve success if you play your cards right.

An understanding of the different types of property investments is essential. Be clear on what you want to invest in: retail properties, offices, business parks, industrial estates, warehouses, land, or properties in the leisure sector such as hotels. Experts recommend not focusing on one sector, but building a diversified portfolio to minimise risks.

To create a healthy portfolio, be armed with realty credentials, in-depth market research, appropriate financing, an eye for evaluating the present and future economic conditions, a competitive business model, a purpose for every asset, and the ability to utilise every square foot to get income yields. Thus, select, acquire and lease appropriately to get a huge ROI.

Selection. For a correct and accurate asset selection, a thorough study of the different local and regional properties and their usefulness is done to make the best bets and the right property mix. This principle helps in the timely recognition of market prospects, which can be transformed into best asset selection and launch of a property portfolio.

Acquisition. The way a property is acquired is crucial and sets you apart from conventional investments. Specialists can help execute property transactions as they organise funds for a particular type of asset.

Leasing. This decides the asset and portfolio value. Execute a leasing programme that supports the portfolio plan and enhances tenant relationships. This could involve having a tenant mix with long-term leases for regular income and short-term ones for capital appreciation. If this sustains cash flow, taking into consideration capital and operating spends, it vitally influences the total portfolio value.

ROI. An asset’s value is associated with its occupancy; thus, leaseback, refurbishing or renegotiation of lease terms could get maximum returns. Leaseback provides a stable cash flow and adds value to the portfolio.

Handy Hints:

* Invest in a property in a good location with useful travel links

* Do proper research on the type of property you want to invest in

* Confide in a team of reliable experts to assess your prospects

Source: Arva Shikari, Special to Properties

The writer is a freelancer


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