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Airport Car Park - Investment
webish
#1 Posted : Thursday, October 02, 2014 10:41:38 AM
Rank: Member


Joined: 10/19/2009
Posts: 671
Location: Nairobi
Just seen an advert on the dailies. Nation Page 8 (2nd Oct, '14).

Seer Property Investments (SEERPI) are selling parking slots, each at 2.8M.

"Guaranteed returns (8%). Buy back option after 5years. Fully Managed " - They say.

Anyone knows how such work? Difference between this and other similar investment opportunities. Has this been done in Kenya before? I'm just curious...no intention to purchase, but would love to learn more about it. It sounds like "buying rooms" in hotels...as a concept.


Life is joy, death is peace, but the transition is very difficult.
DBLyon
#2 Posted : Thursday, October 02, 2014 10:57:17 AM
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Joined: 5/28/2014
Posts: 149
Location: Nairobi
Hmmm...interesting concept. I'm not sure I would do it at 8%. Personally, I'd much rather get that kind of return from a bond, and the government is a creditor of a much higher credit rating. I wonder how much they would buy them back for after 5 years; would the value have appreciated?

I think it is a clever way for the sellor/ lessor to get back their capital to do other projects with...a kind of 5 year loan at 8%. I realize I don't have all the details, but with the little info here, it looks to me like a win situation for the seller/ lessor and a place to park money for someone who hasn't thought of other investment options.

smile
When you live for others' opinions, you are dead.

- Carlos Slim Helu
a4architect.com
#3 Posted : Thursday, October 02, 2014 11:19:18 AM
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Joined: 1/4/2010
Posts: 1,668
Location: nairobi
sounds like a good innovative method of investing in real estate.
As Iron Sharpens Iron, So one Man Sharpens Another.
maka
#4 Posted : Thursday, October 02, 2014 11:27:01 AM
Rank: Elder


Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
But that 8% surely...
possunt quia posse videntur
DBLyon
#5 Posted : Thursday, October 02, 2014 11:42:00 AM
Rank: Member


Joined: 5/28/2014
Posts: 149
Location: Nairobi
maka wrote:
But that 8% surely...


Yup. A flat 8% doesn't factor in the risk of investing with SEERPI. I wonder what the real return on the business is. I expect a risk premium over and above what a bond can give me; surely there should be a reward for taking the risk?

Also compare with the more established companies' bonds - the BRITAMs and NICs...12.5%. These guys are ambitious. But they will get takers.
When you live for others' opinions, you are dead.

- Carlos Slim Helu
webish
#6 Posted : Thursday, October 02, 2014 1:54:00 PM
Rank: Member


Joined: 10/19/2009
Posts: 671
Location: Nairobi
DBLyon wrote:
Hmmm...interesting concept. I'm not sure I would do it at 8%. Personally, I'd much rather get that kind of return from a bond, and the government is a creditor of a much higher credit rating. I wonder how much they would buy them back for after 5 years; would the value have appreciated?

I think it is a clever way for the sellor/ lessor to get back their capital to do other projects with...a kind of 5 year loan at 8%. I realize I don't have all the details, but with the little info here, it looks to me like a win situation for the seller/ lessor and a place to park money for someone who hasn't thought of other investment options.

smile


Some more details..

1. The buy back after five years, is at "Original Price", which means, they will buy it back at what you bought at 5 years ago...
2. "Guaranteed" interest is noted as follows;

- The 8% is Net yield years 1 & 2
- 10% projected for years 3 & 4
- 12% projected for years 5 & 6
(After all costs)..


- On quick research, I find the claim to have done similar concept at Glasgow International Airport (UK), with car parks running at "near" 100% occupancy.

Think Think

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