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Buying A Shop?

Discussion in 'Buying Overseas Property' started by propertastic, Oct 15, 2007.

  1. propertastic

    propertastic New Member

    I am currently in an Internet Cafe in Hurghada checking out the property scene here.

    I'll be making a full report on my thoughts and findings later.

    My initial thoughts are that there is a lot of building going on here - I guessed that there would be a fair bit, but not this much.

    Some people are going to end up being disappointed and I am trying to make sure that this is not me!

    I have noticed that quite a few of the developments have retail outlets on the ground floor although they are not marketed by the real estate agents.

    I was thinking, maybe a shop would make a better investment than an apartment? I'm not just thinking Hurghada here but any resort you can think of.

    My biggest fear about Hurghada at the moment is that there's going to be so much property on the market here in 12 months that yields could start dropping fast, especially for anything other than beachfront. Then there is the problem that there are don't seem to be flights out here from many places year round.

    So I was thinking, maybe get a little shop, rent it out to some locals to sell some tourist tat or the other and get a guaranteed rental income all the year round.

    I see a lot of empty apartments here but not much empty retail in the right areas.

    Anyone ever bought small commercial in a resort before? Any thoughts as to whether it would be a better or worse investment than a regular apartment?
  2. Investy

    Investy Senior Member

    I own some shops in the UK and prior to agreeing to buy a Villa in Saidia Morocco my first notion was to try and secure a shop as I feel small shops in good locations are fantastic investments.

    I was thwarted however as the Saidia site Managers only wanted big brand names in the 500 or so shop units.
    One thing to consider though is that the complexity of owning a shop abroad could make render the excercise a fraught one. Do your homework and watch out for the many charges that will be levied on owners.

    I prefer UK shops in good locations. There can be so much potential and a lot easier to manage than a resi B2L as tenants stay for years and nearly often make improvements out of thier own pocket so you get to own an asset that is being renovated for free!

    Dont listen to all the nonsense about the internet. I use the net for purchases but there will always be room for the 'high st' experience. Humans like getting out and about.
  3. wesrae

    wesrae New Member

    I like your thinking!

    I know of a couple of guys who have done the same in Dubai. Still to early to comment as the developments are not yet finished.

    All indications are that already they could sell at a good profit, or keep them and collect excellent yields.

    I think it definately pays to think outside of the norm.

    Talking outside of the norm, my latest idea...... How about buying a plot in UK without planning and dividing it up into small plots (I can hear you already saying this is already done). But, how about landscaping the plots and selling them as places of rest! I was talking to a Councillor in UK who told me that graveyards are becoming so scarce and planning permission for the right location would be easy to come by.

    Has anyone heard of this before?
  4. propertastic

    propertastic New Member

    I just got back to Hurghada now and will be writing up a report on the situation out there - I saw about 14 developers and a hell of a lot of locations and so I have a pretty good fix on the residential market there.

    I didn't really have time to do much research on retail, but I did have a glance through the listings of ERA Real Estate who are the biggest chain of estate agents in the country.

    In the 'Touristic Centre', I saw one 50m2 shop costing around GBP30,000 and another 50m2 shop for rent at GBP400/month.

    That's a yield of 16%!!

    OK, so it was hardly an indepth study. There were no pictures or actual locations of either unit so it probably wasn't comparing like with like.

    Still, I'd be happy with a yield of half that. Very few residential units are going to be getting that kind of yield with the massive amount of construction that's going on there.
  5. meriaKre

    meriaKre New Member

    I know is not that easy to trust people from Eastern Europe, because of there past, but you have to admit, inhere is a lot of money to make.
    How about anything than a shop.
    Maybe a building that is rented to a manufacturing company on a long term for 1% a month of its value?

    I would like to know your opinion.

    Thank you.
  6. flip

    flip New Member

    Proptastic where have you gone? I was waiting for your report, the shop investment sounds good.

    More info please.
  7. propertastic

    propertastic New Member

    Unfortunately brevity is not my greatest attribute and I'm probably too much of a perfectionist for my own good.

    Propertastic's Complete Guide to Hurghada Property and Egypt's Red Sea Riviera Real Estate (snappy little title, I'm sure you'll agree) is in Beta stage, having come out at 22,000 words over 96 pages covering 32 different properties, illustrated with nearly 40 images.

    My fingers are aching now.

    The report was released to potential advertisers this afternoon to see if they are interested in benefitting from the interest in their properties that the report should generate (well the ones that I didn't give a right slagging to, anyway).

    If anyone is reading this who is selling in Hurghada and I haven't emailed about the project, please PM me and I will give you the link to where the Beta version can be dowloaded.

    I will be posting here when the final version is available to the general public (around the middle of next week).
  8. dave99

    dave99 New Member

    Interesting idea

    I decided NOT to do retail units in my apartments in Hurghada mainly because ther rents are usually very low, there is no guarentee of payment, and no way to be certain what will be sold or how the shop will look, all of which would affect the value of the rest of the development.

    Quite often the units are kept by the developer and rented direct, but as you've noticed many just never get finished and look a mess.
    You also run a risk of considerable competition from other empty units unless you try buy in an area already fully occupied, in which case it will probably not be for sale anyway. And how do you value a retail unit - if it was a business that you were valuing as a going concern you have the accounts etc, but not so in for the space / unit itself.


  9. flip

    flip New Member

    Any update yet on your Egypt guide is it ready for the general public?
  10. propertastic

    propertastic New Member

    I made the final few amendments to it last night so it's all finished. Now it's in the hands of the techies to get it up on the site with all of the advertisers' links working properly.

    If they pull their fingers out, it could go live late today. I have a feeling it's more likely to be tomorrow though.
  11. flip

    flip New Member

    I have looked still not on your site any update?
  12. propertastic

    propertastic New Member

    Just sent the final, final version to our technical guy literally 10 minutes ago.

    We need to test everything to make sure it works. If it does, it could be available in a few hours' time.

    I shall be posting on the board as soon as it does.

    Not long to go now, honest! :)
  13. flip

    flip New Member

    Whats up prop? its seems your having delay after delay.
  14. dave99

    dave99 New Member

    Might be my fault

    Might be partly my fault - he asked for some help and I took a while to reply.

  15. propertastic

    propertastic New Member

    No - you aren't to blame.

    It was technical problems at the last minute making links from the document clickable. It's solved now though. Just a few more hours and it'll be live.
  16. propertastic

    propertastic New Member

    Propertastic's Complete Guide to Hurghada Property and Egypt's Red Sea Riviera Real Estate is actually all ready to go now, but I don't want to shout too loud about it as the page giving the info on how to download it is ugly and my tech guy is away at the moment and so can't fix it.

    But it is possible to download it here if you're really keen:

  17. flip

    flip New Member

    Thanks Proptastic for your guide it makes good reading.

    Have you bought anything there yet? if not why is this?

    I still like the shop idea any more info on this side of things.
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