UK Strategic Land Investments
Understanding any investment opportunity requires knowledge. Everyone in the United Kingdom knows that there is a housing shortage in the United Kingdom. This shortage has been caused by population increase and slow building rates. People cannot afford to live in existing housing.
Government has acknowledged the problem and has sought to alleviate the shortage of affordable housing in two different ways. These two different solutions have produced two different but similar investment opportunities. The solutions are Greenfield and Brownfield.
The Greenfield solution has given rise to UK strategic land investments in and around London and other thriving cities in the United Kingdom. The Mayor of London has determined that 240,000 new homes must be constructed by 2020. The land that is targeted has never had any development made on it and is called a Greenfield.
A Brownfield is real estate in inner cities and particularly in the Northern Powerhouse area. The land may or may not have buildings on it now but it did at one time. Government have funded programs to repurpose and rebuild these areas for the last 10 years.
Investment in a Greenfield project and a Brownfield project has some similarities.
Both are considered to be non strategic investments. The difference between government definition and financial reality is confusing. A non strategic real estate venture means that the investor has little or no active role in the decisions about acquiring properties or managing properties.
Greenfield projects are usually crowd funded while Brownfield real estate investments seek individual investors only.
Greenfield projects can take years to produce a return. Target dates of the end of construction in 2020 mean that the funding will be spent by 2020 but it does not indicate any time frame for a return on investment. The return on investment is dependent on collection of tenants, pricing that produces a profit above and beyond taxes and maintenance fees, and payment by tenants.
Brownfield projects do not involve a long time frame to produce a return. Properties are selected in a manner that optimizes the potential that the real estate will be acquired by a third party as soon as possible. Returns of 25 percent per year are reasonable and achievable. No taxes or ownership costs are involved.
Greenfield projects depend on development potential while Brownfield programs are geared to realistic need. The simple idea that parts of the United Kingdom and the inner cities of all of the major cities in the U. K. are waiting to be reborn is not just for improved living for masses of people. Revitalization of Brownfield areas makes much better economic sense than developing new areas that spread cities out and increase the problems that killed the inner city.
Contact Highgrove Consulting (http://tinyurl.com/ya7txza5) to learn more about how strategic land investments and non strategic land investments can work for you.