Investment Watch: Investors Strike Gold in North Dakota

Investors stuck gold in North Dakota last month,TheMoveChannel.com’s  Investment Watch
reveals. A hotel investment in the American state received the most enquiries on the property portal in May 2013, as the oil boom brought buyers rushing to the site.

The US property market is recovering, but North Dakota has driven demand for American real estate on TheMoveChannel.com this year.

Since extraction began from the Bakken formation in 2008, North Dakota has bounced back from recession ahead of the rest of the country. Now boasting the lowest unemployment rate of any state, a rising number of workers prompted developers to build hotels and other accommodation to meet housing demand. This combination of high yields and a strong economy attracted investors last month. The hotel’s projected returns of up to 46 per cent per year generated over three hundred enquiries – the highest number for any US listing on TheMoveChannel.com since the start of 2013.

Investors were also drawn to the strong economy of Germany, where tenanted apartments promising yields of 7.7 per cent received the seventh highest level of interest. The most sought-after listings, though, still tend to be away from the eurozone, with a combination of lifestyle and financial factors driving demand for villas and buildings plots in the Cayman Islands and Belize, the second and third most popular properties last month.

Investors that did return to Europe targeted the student housing sector. Its anti-cyclical nature, which thrives during recession, saw buyers begin to go back to school in time for the summer holidays; a student housing portfolio and a Manchester development, each offering 9 per cent net yields, ranked fifth and sixth in the Investment Watch chart. Another student project in ninth place underscores this growing trend, although demand remains relatively low this far in advance of the new academic year.

While student housing remains a reliable asset, investors seeking double-digit yields were mostly looking at the other side of the Atlantic. A bulk residential portfolio in Cleveland took the fourth highest number of enquiries on the site thanks to the offer of 14 per cent returns per annum on a £22,533 entry fee. Even Cleveland’s rate of return, though, paled in comparison to North Dakota’s gushing opportunity.

Robert Gavin, CEO of Property Horizons, who manage the  property, explains the appeal of the project to both international and local buyers:

“In the current climate and with recent high profile developers leaving investors with significant losses, investors are flocking to Property Horizons’ unique investment, which has both the credibility of a large company established internationally with the reassurance of speedy development progress.”

Indeed, work is already underway on the most recent development site in North Dakota, explains Gavin:

“We have received full planning and construction teams are already making excellent headway and progress with site work and utilities. There are already units operational on site with more coming online shortly.

“This is excellent news for investors who can see a solid track record and reassurance that the development is progressing smoothly. This has been reflected in the huge interest from investors both foreign and domestic; in the weekend just gone, 14 sales were secured even though the office was closed!”

Click here to view the top 10 listings on TheMoveChannel.com for May 2013.