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WEBINAR: Plug your retirement income gap with UK retirement homes

JOHANNESBURG — In the first sponsored Biznews webinar, UK-based property expert Arran Kerkvliet of One Touch Property takes us through a unique retirement opportunity. As a relocated Saffer, Arran is fully aware of what people back home are looking for, and his latest discovery is the opportunity offered by investing in UK retirement homes. Joined by Alec Hogg he takes us through the small print of investing in such a venture. Here’s the free care home guide for your perusal. The webinar has been transcribed below. – Stuart Lowman

Well a warm welcome and wherever you might be in the world coming into our webcast today. We’re going to be talking about investment opportunities in a particular niche in UK property and our expert from One Touch is Arran Kerkvliet. Arran, good to have you in the webinar this morning and you’re going to be driving the process from here. We’ve got your very first slide up – it’s an interesting one.

Thanks, Alec. Thanks for inviting me and thanks to everyone who’s listening in, taking the time out of your busy careers and schedules, I appreciate it. Our company, One Touch Property, we source investment property for investors. Some of them are based overseas in South Africa and some in the UK. What I was looking at today and we can speak a little bit about is the care home investment market, which otherwise is known as the Retirement Home Investment Market in the UK. What we’re going to look into is how the annuity-style earnings from this sector could provide real income for South African investors for their own retirement or potentially for just as a good investment class to add to their portfolio.

So, if you look at the graph on the left-hand side it shows the global trend of an ageing population. If you scroll down to the bottom left you can see that there’s the triangle there, which indicates 1960. Then the bottom access of the horizontal access of the graph shows that there’s some First World countries there, Australia, Canada, Japan and so forth and you can see in 1960 the average age was typically between 60 and 65 of a life expectancy. Then if you looked at it in 2015, the average life expectancy, all the way to 1976, and by 2050 that’s going to be extended up to typically 80 – 82 in some countries.

So, what the implications of that is that firstly; there needs to be a lot more retirement homes for people that are in that age group and that can cater for additional ailments, potentially space for wheelchairs and so forth, and others who just want to live in a typical (SA) retirement home. Just a sense of community, so what we’re looking at here and we’re going to discuss a bit further are the retirement homes that are being built to facilitate this and also how with South Africa’s life expectancy or retirement age also increasing, how this investment class could provide a steady income in a very robust market.

If we look at the UK market specifically -which we are discussing today- you can see that between 1995 and projections for 2035 that the people over 65 or the portion of the population over 65, was only just under 16% in 1995. It is now almost 18% and then it’s going to be 23% by 2035. What we’re seeing is that this is over the whole of the UK. The areas that we’re focussing on are more coastal areas, which are retirement areas similar to what George or Knysna would be for SA. Those sorts of areas where a much larger portion are of the age over 65.

If you click through to the next slide we’re looking at retirement homes here. We’re looking at how the shortfall in retirement homes compares to other countries. So, in the US, New Zealand, and Australia there’s 25% of the population over 65 live in retirement communities and in the UK it’s only 4%. If you look at the second paragraph there what Berkeley Homes is saying is that, and this was published recently in the Financial Times, is that for each of the retirement homes they’re typically looking at making £30,000 per bed or per studio each year and that each retirement home can typically be making (these are the smaller ones) £2m per year.

If you looked at the graph on the right-hand side what you can see there, this is the total UK care home rise in weekly rents, so you can see from 2006, on the start of that pink line, which is around £550 and now you’re looking at around £700. What you can see on the green line there is that it’s talking about the return in real terms (de-cuting costs and inflation). What you see there is a little bit of a decrease and then an increase again but what this analysis is showing is the UK care market as a whole. What we’re focussing on today is the retirement homes and not the other part, called Nursing care – which is more for people with dementia or elderly and infirm; where they can’t actually take care of themselves. That is a high portion of nursing care, so that means that 60% of the costs are associated with the nurses and that’s why you see in that second line there on the graph that goes down is because of the increase of nursing costs.

So, that isn’t as relevant because we’re talking about retirement homes, which is just for people who are going into a ‘retirement village’ to go and enjoy their time and be around like-minded people. If there’s any questions, for now, I can take them otherwise we can move onto what a retirement home or a luxury care home is in the UK.

Luxury care homes in the UK are the same as what we call ‘retirement homes’ in SA but what they would do is as there’s not as much space here in the UK, a lot of people are downsizing from their 3 or 4 bedroom home and what they are intending to do is to go into a retirement village where they’ve got a spacious studio, which means they’ve got a kitchenette and they’ve got facilities and grounds to make use of. Can you can see that picture over there, it’s a stately home which has been converted into grand sized studios. Guests will have meals prepared and they’ll have activities such as wine tastings, country walks… it’s really about being around like-minded people that are also of retirement age.

Now why people in the UK are doing this and there’s increased prevalence of this is that there are more inheritance tax for people that have houses over the value of £650,000, which in a large portion of the SE and SW of the country the houses are over that price. What they’ll then do is go into one of these retirement homes then potentially purchase a property in France as a holiday property and then start gifting some of their funds to their children, to decrease their inheritance tax implication. You can see this is what the properties look like. If you go onto the next slide I can discuss things further…

There’s a question here about exactly that point, inheritance tax. The question comes from Rowan, who says will it apply to my inheritance tax in SA or is it exempt, so if you invest in it?

Again, it depends on how you structure it. There’s a lot of clever ways to structure your portfolio and we can certainly introduce you to the right professionals. The simplest way is if you do purchase it is a commercial property and you would own it. If you own it in your personal capacity then if it is declared then it would be subject to the inheritance tax in SA. In terms of the UK the personal inheritance tax is higher on residential property. Whereas on this, which is defined as a commercial property, the inheritance tax is lower. So, it’s generally 40%, if it’s not your own personal home over £650.000 but if it’s a commercial property, which is really as an investment it’s only 20%. But in terms of your South African inheritance tax; that would be applicable on purchased in your own name (if declared).

Unless we structure it in terms of putting it in a Trust or a company; but if you register your interest on the website below, Onetouchinvestment.co.uk, we can discuss your personal circumstances and put you in touch with the right professional to help mitigate the tax implications because I’m not a tax expert. We’re property sourcing agents but I do know quite a bit about it through our experience but it’s better to get an individual consultation from one of our tax experts.

I’m sure Rowan will be satisfied with that answer thanks, Arran.

Pleasure, so more about the community lifestyle here. The properties come with two options; a) The Investment option; which most of the South Africans are going to be interested in b) The Personal use option for South Africans who have Ancestral UK Passports. What they’re looking for is also if it has the capacity, that if things do completely awry in South Africa, which we hope they don’t, to actually live in property. The answer is yes, (a) it is an investment, which pays a healthy return but (b) it comes as a lifestyle choice as well. These properties are luxuriously finished to high specifications. They’ve got plasma TVs, wi-fi, some nursing call systems so that if a person chose to opt out of the rental and investment they could actually go and live there and just pay the community charges.

It’s quite a nice backup plan but in terms of the investment itself, as you can see on that picture on the right, you are purchasing a suite or a studio within a retirement home. The operator then leases it back from you and pays you a lease amount, which is 10% net income. They then run their business from the property and they take care of the repairs and take care of the grounds around the property, so what they’re doing is they will then rent the properties out to self-paying customers. They’re in affluent areas of the country, they’re typically Victorian conversions, stately homes or potentially some retirement homes, which were nursing homes before, which obviously have come under pricing pressure with the increase in nursing costs, so those will be converted to retirement homes, which is more for self-paying guests.

Then what they would get is a fully managed property but also with up to 25% capital gain, so if you go onto the next slide it explains a specific example. This is one of the care homes we’ve got. It was a 52-bed property in Somerset. As you can see it’s a nice property over there. It was a stately home, which they converted it into retirement suites. A person could have bought one of those for £85.000, and paying a 10% net income. What they then do is you own the property, so if you look at the floorplan on the right-hand side you can see that square that’s highlighted there that is actually, one of the studios that a person would be buying. It’s got kitchen facilities, a little lounge area, and so forth. In terms of the retirement village as a whole; you’ll have a lot of communal areas, lounges, recreational areas, it’s got 3 acres of grounds around but what you’re purchasing there is the actual care home suite, which you’ll get the legal title for that, you are not investing in the company. The the operator would lease your property back from you and then they would take care of finding the occupants and would be responsible for all the upkeep of that property. They are essentially running their business from your property and taking out a 10 year lease with you at 10% Net Income.

At year 10 they then buy it back from you at 125%, so you’re looking at receiving that annualised, typically 2% annualised capital growth, which is in line with inflation in the UK. For SA investors why they’ve been rather interested in this is looking at it from a currency perspective at the moment. Even with all the political dramas going on, the Rand still seems to be quite strong relative to the Pound and for sure there’s medium-term uncertainties with regards to Brexit but certainly, if you looked at a 5-year horizon the projections are that the Rand would be losing around 5% annually towards the Pound. So in real terms the growth at 2% is not quite in line with SA inflation but when you take the currency into perspective that balances out the growth and obviously, not only do you receive the higher income returns, which could obviously be 12% – 14% but is looking at the capital growth side as well, based on the currency projections, there is a distinct possibility of achieving 40% capital growth in real terms.

Arran, they’re a couple of questions here. The first is from Eugene van Wyk wanted to know whether there would be a text format of this. Yes, Eugene, we are transcribing the presentation and it will be up on BizNews. Then Shaun wants to know are the properties purchased as freeholds/share of freehold or long lease? Let’s deal with that question first before the second one.

Eugene, this our image format of our care home guide. If you go to the website of  Onetouchinvestment.co.uk, there’s the carehome sector then you can download the free guide, which is a lot more text heavy and explains the sectors and how the nursing care differs from the retirement homes, so if you take a moment to do that, it’s free for you to download with no obligation.

In terms of the other question from Shaun. This is a lease held property, so what that is, in SA terms, like a sectional title property, so you’d own that particular property and the next slide explains it quite well, so if you go onto the next side.

Shall we just handle the 2nd question quickly, which is the…?

That’s what I’m saying, is the leasehold and freehold, yes. This particular property there, (go back to the slide – sorry back one), is your property, your studio. You receive the Title Deeds for that and that is a leasehold property, so if you looked at this block over there the ground that is underneath the block; that is the free hold. Essentially, what would be paid normally is a ground rent, which is around £250 per year but because they are then leasing the property back from you, you don’t pay that charge. They, the operator, pay that charge to the free holder, so it really is like sectional title in SA.

If you go onto the next slide you’d get 125 year leasehold, which again is like your sectional title. As I’ve written over there, on the top right, you see there’s Land Registry. That’s the name of the Title Deeds Office over here, so you can see your Title Deed, which will show on the Title Deed that you own that particular studio and that it’s for the lease period of 125 years. It’s not a lease like you’d get in Mozambique where you’re leasing the land or property and give it back to the Government thereafter. In the case of the care homes you actually own that property, so if he lease period came down to, let’s say 80 years you would then propose for an extension back up to the 125 years and that essentially costs around £2.5k – £3 thousand. What we’re looking at here is quite a structured investment. The investment is really for a defined period of the 10 years. You could obviously sell it any time because you own the property and the Title Deed, you could sell it at any time before then but at year 10 you’ve got the option to sell it back to the developer at 125%.

That seems like the most sensible option because we don’t know what the lease or you’d have to renegotiate the lease in the future, after 10 years. That’s fine, it will probably be at a higher rate, based on the supply and demand until we know for sure. This current lease, which is not the lease hold that we’re talking about in terms of the form of ownership. We’re talking about the lease from the operator who is now looking after your property for the 10 year period. At the end of that lease they will purchase it back from you with this uplift, so in terms of renewing your ownership, extending it back 125 years. It’s not something really that people need to consider.

The second question there is, is there a certain rental coverage a lender would look for within this C2 used class, in other words, C3 rez C is 140% of mortgage payments. Now, Shaun, you’ve got me there, Arran hopefully you fully understand that or shall I read it again?

Yes, Shaun, it sounds like we’ve got a very savvy investor there, so he knows the class uses and so forth. The loan to value – if you were going and purchasing the entire care home then you could typically get a 65% loan from the bank. But what we’re looking at here is that most of the investors, the SA investors they typically, or even other overseas investors, they typically might be only purchasing one of the care home studios, which is only £85.000. The commercial lenders are not really interested in getting involved and providing loans at £85.000. There are some where they’d provide loans at £150.000, and we’re typically looking at 5% as the interest rate and certainly the income you’ve got at 8% will cover repayments. It certainly covers those ratios but if Shaun’s got assets within the UK, then the mortgage is more feasible.

But for the majority of the South Africans this is really a cash purchase because they’re not really going to lend to South Africans who don’t have assets in the UK just because they’ve only got, from a security point of view, it’s such a small loan and they need to have some sort of recall. In general, most of the South Africans have found that the £85.000 as a cash purchase, generating £8,500 income is really something that fits quite a wide range of peoples’ affordabilities.

There’s another question here from Polly who asks how is the yield paid back to South African based investors, is it paid back to SA and what are the tax implications?

Most of the South Africans have set up bank accounts in the UK. The easiest one is through Barclays and you need to just have £20.000 to get started and that income can go straight into the investment. With the South Africans being able to take a travel budget of £1m per individual a lot of South Africans are coming across here and then depositing the money in the bank accounts and then just having the funds on this side, which from that perspective the income tax is not relevant as long as the assets are over here. If you are sending the income back for your own retirement purposes again, it would be best to register your interest and then we could put you in touch with a professional. Some people are structuring it in a way of a Trust and then loaning the money from SA to the Trust and then any income that gets sent back is basically not capital repayments.

The income is repaying the loan, so it’s not earnings. The tax expert can explain that further but there certainly are ways if you need the income in SA, there certainly are ways of structuring it that doesn’t impact on your income tax liability.

We’ve had quite a few more people joining us. If you’d like to ask a question just type it in, in the box that’s provided. There’s a question here from Jeff Watts who asks, who guarantees the 10 year buy back and how is the guarantee under-written?

There’s a couple of operators that we work with, so one on the retirement side is the Care Home Group and if you’re registered and interested we can keep you updated with some of their latest opportunities. What they would do is they would underwrite the buy back and what they’ve got is they own the freehold of the properties and essentially, from the investments the typical one, if some people joined late. In some of the earlier slides, which you’d be able to revisit at a later stage. Typically the care homes are making a 35% EBITDA, so if they’re only paying you 10%, they’re making a healthy 20% profit per annum.

In terms of the way that they’re building the business model is that that cash is being retained and, also reinvested into other free holds, so the freehold interests in a portfolio of investments can certainly facilitate just a mere 2% uplift per annum. What was interesting for them is that as a group if they purchase back the portfolio of several care homes all of a sudden it becomes more interesting for an investment fund, like a real estate investment Trust to purchase a portfolio. They would then purchase that back from the Care Home Group at a profit, so there’s the motivation for them to purchase it back because they could potentially be making a lot higher gain from selling a lot of the care homes collectively, as a group to an investment fund who may only purchase it back at, for instance an 8% yield where the real yield in the future may be 12%, if that makes sense.

There’s a question here from Trevor Barnes, who wants to know is there some sort of Home Owner Assocation with minimum guidelines for maintenance, security, etcetera?

Yes, there are two elements to this. This is on the retirement homes side and the retirement home side they don’t have the Care Home Committee. There’s a thing called the Lease Holder Tribunal, which is a Government run panel, which essentially if the community facilities aren’t being well kept that you could then change the freeholder but what Trevor is asking really more with residential property.

In this particular structure of the investment the care home operator is motivated to keep the facilities up to scratch and up to standard because that impacts on their income. So if they’re letting it go down and they’re not going to be making the income or getting the volume of occupants that they would need because they’re essentially renting the property from you and running the business.

So, in terms of the community charges and those sorts of things, it isn’t like you’re owning or have your own property in Cape Town and the community charges in one of these luxury estates got out of hand. That isn’t the case here because they’re actually renting the property from you and running their business from you, so they’re motivated to keep the property up to standard and you’re not paying for all those community charges. They are giving you a 10% net income and they’re covering the costs, all the operational costs because they’re running a business from there. It’s slightly different, if that makes sense.

It certainly does, Eugene van Wyk has got a question that I think we know the answer to but you need to apply your mind, I guess. Can non-British passport holding South Africans go and live in their British retirement investment homes?

That would be beautiful if you could but the Government passport restrictions still apply, so if you had family members and other things like that then for sure there’s several ways for applying for indefinite leave to remain but as a standard South African, just because you purchased this property that will not mean that you could just go live there without meeting the Government’s passport requirements and immigration requirements.

So it’s an investment, it’s not a way of getting into the country?

No, it’s not one of these golden visas. It’s more for investors; you’ll find that probably 30% of the South Africans that are purchasing have got European passport or children that are living here and they potentially could validate a reason for that. But it’s primarily for an investment.

Okay, should we go to the next graph?

Yes, so in terms of the underlying investment there’s obviously information about  the specific the companies that you will want to find out more about and if you register your interest we could go more into the specific companies. However, if you’re looking at the fundamentals of where these care homes are based.

You’re looking at places like Cornwall and the next slide is Somerset, and where that is, if people don’t really know. It’s in the SW of the UK, so if you look at that picture on the left hand side (that red part) indicates the bottom left of the UK, so it’s kind of the warmer part. The retirement population obviously, is flocking down there and as you can see on the National Census that was taken (if you go to the right) in 1991, 2001 and 2011, you can see on that bar chart that the highest portion of the population is between that 60 and 64.

As you can see from the medium term plans of your investment you’re really targeting the largest portion of the population. As you can see that’s increased by 31%, from 2001 to 2011, which is when the last census was taken. If you skim to the next slide you can see Somerset, which is the other region where the care homes are. Currently 10% of the population is over 80, so you can really see that from 65 – 80, which is your target market in the warmest parts of the country.  You can see why people would want to move down there.

Skim down to the next slide – again, you’re looking at and that’s for Somerset and you’re looking at your average age by 2038, you can see it’s almost a third of the population that’s going to be 65 there, and that’s increasing by 61% during that basically, 2014 when this was done, to 2039. If we can skip to the next slide please, Alec.

This is just interesting, as you were looking at those 2 counties, I’m sure they’re amongst the highest leave voters in the UK. I haven’t looked at the numbers but I’m sure they the ones that wanted to leave the EU, didn’t they?

Yes, definitely and one of our investors recently commented and he said, “Arran for me, I’ve just bought a house in Gloucester. I’ve got ancestry and what I loved about old or middle England is really the communities. You’re being made up of 95% British people.”

People ask what about if things go wrong? I’m purchasing this care home and the fundamentals are there but what you’re looking at is looking at the particular customer, who is renting this property from  you. You’re talking about people that are over 65. They’ve made their money, they’re self-paying customers. It’s not like they’re going to run away or not pay their rent. It’s good old eggs, as you could say, and they’re in the best parts of the country.

Ultimately, yes, there is the care home operator which is there but if things did go awry you’re still well positioned in the best and warmest part of the country and as you can see from that picture there one of the most beautiful parts of the English coast, which is obviously the most desirable for that target audience to be retiring in.

About One Touch Property

Yes, if we could go on and talk a little bit about ourselves. One Touch Property – I formed this company in 2008. I’m the director, I’ve got a degree in economics and property evaluation. I started the company the ethos of One Touch, as the name suggests, to provide that connection and that personal touch to investing. What we are doing, as “Your partner in prosperity” is resourcing investment properties and identifying high yield sectors. This one is the care home and we also do things like student property, for which we’ve won numerous awards. If you register there on the site we can discuss those other opportunities or you can find some other opportunities there but what we do for overseas investors is we take the hard work out, in terms of finding reliable developers – ones we’ve done background checks on and that have completed developments. Then more than that we provide a personal touch, so we come to SA every 3 months, so people can arrange face-to-face meetings and we can discuss your portfolio requirements then.

We also provide hands-off investments, so for people that are really looking for not a buy/to-let where you would have to speak to a lettings agent or you’ve got the risk of default. What we provide are more commercial investments, were it really is while you’re sitting 11.000 miles away you’ve got a box that makes you money, that is in a highly desirable sector. More than that we belong to some bodies there like the Property Ombudsman that if there are grievances there is a process there but none of our investors have had to use that.

If you go onto the next slide we’ve got some feedback. Nick Sharp is one of my long term clients. We’ve got investment consultants over here. These are investment consultant who will look after you individually. Graham Broadhead, one of my investment  consultants, worked with and as he says there, it really is about honesty and trust, so if you look at One Touch Property and type in ‘bad reports’ or ‘scams’ you’re not going to find anything on us there.

Just skip to the next slide, which goes back to the care sector. This is one of the opportunities we found. It’s currently available and it’s in Cornwall, so that’s one of the regions which we identified earlier, so that’s got the structure. It’s got the entry points at £85.500. It’s a Victorian building. It’s going to have fine dining over there and wine tastings and chauffeurs. It’s in a great part of the coast, countryside and beach front. This is one of the opportunities that if people are keen to find out more about the purchase process and discuss the live opportunity. They can register their interest and speak to one of the consultants who will tell them a bit more.

If you go through to the next slide, if there’s no specific questions? That’s how you could register and I can also provide you with the full written guide, which will outline more about the sectors, than we could run through today. If you send your enquiries to [email protected] or register on that site and we’ll be happy to assist.

Well that’s good stuff Arran. Just to let you know that if you have any more questions it’s very easy just to type them in at the bottom otherwise we’re going to let Arran go in just a moment. I just want to ask you one question before we do go. That £85.400 that’s a little bit over the R1m a year limit that the SA taxpayers have. Is there any facility to kind of do a layby on this?

Yes, I think we do have opportunities where they’ve got a slightly longer completion date. What we’ve done here on these properties that none of them are new build projects, so there’s no development risk. They typically are completing within a 6 month period, so like I said it’s a stately home that they would refurbish to a high standard. If we’re looking at it now, being July, there’s a facility to pay certain amounts now and then have the rest of it come over in the following year. In practice though we found that that’s mainly for individuals. If there is a couple for instance, each person has their R1m allowance, so there certainly are ways in structuring it and the developers [who’ve got this opportunity] but somewhere there’s a slightly longer completion date, so it would cross over 2 years.

In that way we can get around that but we also do have companies that we partner with, who work closely with South Africans to set up their Reserve Bank Clearance and that can typically take a 4 week period, so you don’t have to do the hard yards on that. They would actually take you over that for you, so there are people that are looking to send R4m across a year and then once it’s here, while the exchange rate is still favourable, they could do it that way.

Then just to confirm that 10% net return for 10 years is that per annum? Is that what you’re getting your hands on in capital growth? Is that yield? Just unpack that.

Yes, the 10% is the net income payment, so the SA investors would fill in a non-resident income tax form or the companies, we’ve got one for that as well. Essentially that means that the tax isn’t deducted at source and you’re getting a real net income there. Then in terms of the capital growth there’s the buy back at year 5, which is at 110%. That’s just ones that are set in and contractually agreed, so the developer is buying back at that stage and at  year 10, at 125%. But you are able to sell it on the open market at any time, so if you needed to realise the cash for whatever reason you could do that. Does that answer your question?

Yes, just to be real specific then. Your yield or your income flow will that be about £8,500 a year, roughly?

Yes.

Then in 5 years time you can sell the unit back for about £93.000, so are those the important numbers to bear in mind?

Yes.

Of course, if the Rand continues on its sliding path, which I see it’s taken another hit today. That would obviously, make a big difference in Rand terms to your returns?

Yes, definitely. If you look at the 10 year example, 25% on £85,400 is £21,350, which if you looked at in Rand terms at today’s exchange rate, I think it was 16.5, it’s R352,000 but if you looked at that and looked at what they’re saying in terms of a 5% fee evaluation of the Rand over a 10 year period. You can multiply that by 1.5 again, so you’re looking at it, all of a sudden in terms of R528,000, if I’ve got that correctly?

Yes.

Yes, R528,000 growth, so R500,000 growth over the 10 year period on an investment, which is essentially in today’s Rand terms, so on a R1.4m investment you’re looking at getting R528,000 in the capital growth, plus your 10% income.

Yes, that makes a lot of sense, particularly when you are having a hedge against the currency. Well, thank you very much Arran for sharing your thoughts with us today. There are a few more questions before we let you go. The first one is from Trevor Barnes, he says the foreign allowance is actually R10m. Yes, Trevor, my question was about the R1m a year that you can put in without no questions asked but you’re absolutely right, isn’t that so Arran, the R10m if you do apply to the Reserve Bank?

Yes, that’s right. That’s with reserve bank clearance that you could do that but thanks for point that out. That’s correct.

Then Verner has got a couple of questions. The first is how long would it take on average to get the unit occupied?

The units’ occupation typically takes between 6 – 12 weeks, so with that in mind what they normally do is when they start the refurbishment, which is anything between a 4 – 6 month period. What they already start doing is advertising, so at the moment they’re running quite a big, extensive advertising campaign in the SW England, so the BBC and ITV News are running their advertising campaigns that way. On the date of completion they’re typically, already 50% full. Then over the next 8 weeks they would get to full occupancy, so what you’ve got to bear in mind, and it’s a good question if you’re looking at the demand side of things. They are still paying you the income of the 10%. They’re taking the risk of how long it takes to get occupied.

So the vacancy or the period of vacancy, before occupation, is not your problem, that’s the developer’s problem?

No, there’s no relevance. The occupier, which is the company paying you the 10 year lease. They’re taking that risk.

Great, well Arran Kerkvliet is the principal at One Touch Investments and as you have seen, with this presentation, you can go onto their website, onetouchinvestment.co.uk and there’s lots of details there, register as I think you told us before and you’ll keep the guys informed?

Perfect, thanks for affording me the time and I appreciate you all taking the time out of your schedules and we’re going to do another one potentially, in a month’s time, so look out for that.

Excellent, Arran has got quite a few interesting niche opportunities. This one is one and as he said earlier there’s also the student accommodation and so on, so we’ll be back with you then. Thank you for joining us for this Business BizNews sponsored webinar and we will have everything on the site in the next couple of days, with the full transcript of this conversation and the graphs that go along with it. I know Ridwaan was struggling with his computer. He couldn’t seem to manage to pick up the graphs but we’ll have all of that up for you on BizNews in the next couple of days. Thanks for being with us today. Cheerio.

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