When Asset spoke to Craig Featherby, founder and CEO of the Carrick Group of Companies, and Bradd Bendall, group sales director, in July 2020, they were quietly confident about the launch of Carrick’s global real estate investment strategy. Fast forward to now, and Carrick Property is soaring into 2021 with a top-performing international portfolio and compelling new South African ventures in the pipeline, says Craig.
“In 2021 there will be significant advances in the development of our fully integrated financial advisory model of which real estate is an important component. To achieve the sales revenue that we did in the midst of Covid-19 was exceptional. We made some very calculated decisions as to how we would move forward in a proactive and positive manner, and they have paid off handsomely with revenue and net profits outstripping those of 2019," he says.
The company is justifiably proud of being named Best Adviser Firm – South Africa – in the 2020 International Adviser Best Practice Adviser Awards, which count Quilter International as a partner. Industry recognition will undoubtedly boost Carrick’s drive to grow its business both nationally and internationally as it seeks to future-proof clients’ investment portfolios.
Bradd, who is acting MD of Carrick Property, tells Asset that the success achieved in 2020 has acted as the springboard for Carrick Wealth to open an office in the UK next month.
“Last year we put structures in place that enabled us to capitalise on opportunities and market for success. Now, by opening a UK office, we are building on what we achieved in 2020. We’ll have feet on the ground to service a client base wanting to purchase real estate in the UK and Europe as an investment. The presence of an office will definitely allow us to fine-tune our offering, deepen our understanding of these markets and ensure optimal safeguarding of our clients’ assets. This is of paramount importance to us.”
Craig adds that the company aims to lead in the field in the manner in which it supports clients who invest in property offshore. It has already established committees which vet potential properties, and has appointed mortgage brokers as well as service providers who manage assets for Carrick clients. The presence of a UK office will enhance its efforts on behalf of its client base. By the time it opens in March, it will add muscle to the marketing campaign being launched for Carrick’s latest European real estate project.
The spectacular Halcyon Retreat Golf and Spa Resort in Limousin, in the heart of the French Lake District, has given Carrick the exclusive rights to market this prestigious development. Centred around a breath-taking 16th century château, the 5-star luxury resort is part of the Wyndham Hotel Group, the largest hotel group in the world. The extensive grounds - 90ha - feature an 18-hole golf course, tennis courts, forests, a fully stocked lake for fishing, a world-class spa in a turreted smaller château, fine-dining restaurants and a children’s adventure area. Original stone cottages and buildings have been remodelled into 216 units for purchase, forming an ‘authentic’ French stone village complete with a boulangerie and pâtisserie.
“We were delighted to be approached by Halcyon,” Craig says. “They knew our reputation for putting our clients’ interests first, and this project provides us with something really special and unbelievably exciting. It is very different to the properties we market in the UK, Germany and Portugal, and adds another layer to the real estate investment portfolio we offer. This is a premium product which can be rented out or used by clients to spend a fantastic holiday with family and friends.”
Bradd believes that investing in a unit in this R1.2 billion resort will have enormous appeal for Carrick’s South African and French-speaking African clients, whom it services out of offices in Mauritius. The apartments – over one or two-storeys - are elegantly furnished and have spacious bedrooms, en-suite bathrooms, a lounge area and a kitchenette in selected units.
“This is a slight deviation from a true buy-to-let product but it is a stunning development and investors will be buying bricks-and-mortar. It is incredibly well-priced for South Africans with units ranging from €180,000 to €1.1 million. Historically, the returns on Halcyon’s developments are superb, so to be given marketing exclusivity is fantastic.”
Carrick has negotiated a 6% rental guarantee from Halcyon for the first five years which, when set against a 2.71% interest rate, makes perfect commercial sense, says Craig. After five years purchasers have three options: they can sell their apartment themselves at the market value or roll it over for another five years or give the unit back to the developer who will return what they paid for it. So in essence 100% capital protected, he emphasises.
“If you roll the apartment over for a further five years, the developer ups the rental yield to 8% per year for the next five years. Thereafter you can either sell it on the open market or the developer will repay 150% of the purchase price. For us the financials make so much sense, which is why we’re very eager to present this prime asset to clients.”
While the Halcyon resort campaign swings into action, Carrick continues to look for real estate investment opportunities with solid yields in the UK market. Its apartment sales in Slough and Birmingham are strong, and the assets continue to produce good returns for clients looking for more balance in their investment portfolios.
“Birmingham itself is a massive success story,” Craig says. “In the past decade it has undergone a complete transformation with a GBP150 million redevelopment of Grand Central shopping centre and a further GBP500 million ploughed into New Street Station. An additional one-billion-pound regeneration program is pending in 2021.”
“From a rental perspective all UK rentals are expected to increase, especially in the South East. However, Birmingham rentals are projected to increase by 12.5% over the next three years, which is a great incentive to invest there. We are settling aggressively into this market and working hard to find the best opportunities for our clients.”
In another innovative move, Carrick Property plans to register as a South African real estate company in 2021, but there are no plans to compete with established estate agents, as Bradd explains.
“Our focus is on building our clients’ wealth, but the reality is that many of our investors do look to us for property advice as regards investing in South Africa, so it makes perfect sense to have a registered real estate presence in the country. It will be a niche operation with offices in major South African cities, and we’ll be looking at partnering with developers to create the kind of real estate investment opportunities that we’ve unlocked offshore.
“An interesting new arm of our business is our partnership with a programme called Retire to South Africa. It’s based on a US Government-backed programme which encourages its citizens to retire to other countries which are more affordable. The South African initiative envisages bringing 1000 families a month from the UK and the USA to live or retire here. 70% of them would be people who would generally invest in property. This opens a unique real estate advisory channel for us, focusing on financially viable property investments and retirement planning, something we are eminently skilled to do.”
Craig emphasises that Carrick’s strategy remains focused on creating an integrated financial advisory model, hence the reasoning behind the establishment of a South African property business with a local licence to facilitate smart property deals for clients which complement their existing investment portfolios.
“Clients may wish to up their real estate exposure, and who better to speak to than your financial adviser. We don’t intend to become estate agents but we do want to offer an exclusive ‘one stop’ real estate service to our clients.”
In yet another move to accelerate growth and maximise opportunities, Carrick has signed a joint venture with One Global Property Services. George Radford, MD for Africa and SA, is a former business colleague of Craig’s from their IPG days, and the partnership is a welcome one.
“We really value having someone of George’s stature in the global industry wanting to work with us. One Global has opened up massive markets for us,” Bradd says. “From a product perspective they provide a unique offering. They have got skin in the game, and that’s critical for us from an investment perspective. In 2019 they completed 1.1 million global transactions equating to USD257 billion. They are backing Carrick to take them into the South African and African markets, and we have negotiated exclusivity in distributing their properties throughout the African continent, which means excellent deals for our clients.”
Bradd and his team have set bold and aggressive targets for 2021, but as he jokes, he’s holding them close to his chest to avoid being held to them by Craig. However, he believes they are in fact conservative when he looks at the astonishing projects Carrick is involved with.
“It’s truly exhilarating being involved on the South African, African, UK and European stage. The potential is huge. Our clients are getting used to the idea of investing in countries like Germany, for example, where a First World economy delivers First World returns. The Halcyon resort will attract a high-net-worth individual who would like to spend time holidaying in France and playing golf. Our other European and UK properties offer attractive options if you want to diversify out of equities into a safe asset class. Each has a strong investment case”
The average age of Carrick clients looking to secure property offshore is shifting from mid-50s into the late 40s, which is understandable, Craig says. “Buying property as an investment overseas instead of SA is appealing. Depending on how you gear the property, you’re borrowing at 3 or 4% but getting a 6 to 8% yield so you will see an increase in a younger sector investing offshore. The pressure on financial adviser to find yields is immense, and offshore property investment is a profitable move.”
There’s no denying that Carrick is pulling out all the stops at its disposal to differentiate itself in the market and find fresh opportunities which will yield above average, sustainable returns. Craig credits a great team and a very resilient client base for the drive and positivity that is so evident in the company’s upbeat approach to the year ahead.
“Twelve months ago I wouldn’t have believed you if you’d said we’d own a property business,” Craig says. “But here we are aggressively expanding Carrick Property which has been established very successfully on the back of our proactivity in finding new investment opportunities for our clients. We’ve come up with a very different premium opportunity in a beautiful area of France. Our UK and other European products are performing exceptionally well, and we have innovative new growth areas emerging in SA. Being awarded the Best Adviser Firm Award for 2020 is the cherry on the top. It can’t get any better.”
It can, says Bradd. Watch this space.