Agent sets up South American conduit
24 March 2005
National Business Review
(c) 2005 The National Business Review
March 24, 2005
OVERSEAS INVESTMENT
Argentina is said to be a country with huge and numerous property opportunities
Coran Lill
Fresh back from a two-year sabbatical, Bayleys agent Geoffrey McRae has set up a new venture to provide investment opportunities for New Zealanders in South America .
Formerly with Bayleys, selling top-end real estate , Mr McRae took a break with his wife, intending to travel to Europe via three months in South America . After a summer in Europe, they quickly returned to Argentina and bought an apartment in Buenos Aires .
They now want to return for a visit this winter - but intend to do so with a group of hopefully around 10 New Zealanders who want to invest in South American property.
Mr McRae will charge such potential investors $US2500 each ($3375) to participate.
New Zealand investors, including farmers, are already on the South American property-buying circuit, but Mr McRae believes his is the first formal channel for such investors.
So far, five people have shown an interest in the seven-to-10-day visit. They are 50-plus, independently wealthy and include established farmers looking to spread risk and forestry investors looking to get a better return.
Countries such as Argentina were on the up economically, Mr McRae said.
He said this was partly because of Argentina 's fertile soils, stable continental climate, generous water supplies, low land cost and relatively cheap labour - not to mention increased economic and political stability.
Opportunities that stood out to Mr McRae in South America included large cattle ranches, forestry, vineyards, dairy farms and cropping operations. Other countries in South America with opportunities included Chile and Uruguay .
This is in spite of a 2004 Jones Lang LaSalle survey that labelled countries such as Argentina as having improved but being "low-transparency" - meaning in general it lacked market data, showed inconsistency in applying regulations, had no published simple regulation or code on real estate practices and low enforceability of real estate contracts. Chile and Uruguay scored better - with a semi-transparent rating.
Mr McRae acknowledged South America was not as transparent as markets such as Australia , New Zealand and the US but it was naturally more difficult to make money in such markets because there was too much knowledge, he said.
"Transparency also varies from area to area. There are a lot of very American, English and Italian farmers and resort owners in the Argentinian region of Patagonia . It's more transparent because they're used to foreigners, and many real estate companies you deal with have links to North America .
"The real attraction is if you are a large investor who wants to get on the organic export market. You can grow many crops at a very low price in every shape or form. The cost is considerably less because of the cost of land and labour.
"Many New Zealand growers should team with up Argentinian growers and supply markets we used to supply but that we're now priced out of." |
