As experts in real estate and investments, we know that it does not pay to invest in projects where the increase in value is left to chance. That is why for our funds we specifically select development projects with plenty of potential to add value by developing them. Equally important as choosing developable real estate is the fact that we focus on successful growth centres when selecting investments. Find out more about our real estate projects here.
How this works in practice is that we buy an old office building and apply for the necessary permits from the authorities to allow us to change the use of the real estate. After obtaining the permits, we renovate the property until it is as good as new, including renewing the entire building services engineering. We may also pull down the old property and replace it with a new one if this is more profitable. We focus on building architecturally beautiful, energy efficient properties that are comfortable to live in and a pleasure to use.
Our development projects may also be plots on which we build an entirely new piece of real estate. The apartments are already sold during construction or at the latest very soon after it. In short, we add value to the real estate by developing it. Performing real estate development on a large scale produces significant synergy benefits. It keeps the purchase prices of the real estate and contracts low, the use of the real estate can be changed and even an extensive change of building services engineering is possible.
We expect our investors to commit to our alternative investment funds for a certain period, and the money will be available to them, with profit, after the project is complete. An exception to this is the ICON Real Estate Development Special Investment Fund, which is always open for new investments and redemption. Based on the results of the funds ICON Real I and ICON Real Estate Fund II, we can sincerely boast that ICON’s investment strategy is second to none.
Often the problem with investing in new dwellings is that they only offer rental income. The value of a dwelling is difficult to raise at a later date because it is already new with all the finishing touches. Also, the profit obtained from the rent quickly go into the fund’s administration costs, leaving nothing for the investor. So if you want to invest in new dwellings, it is best to own them yourself, which will save you high-priced fees.
Investing in old real estate is usually not profitable, especially if the property is located in an outlying area. Dwellings that have seen their best days need renovation and this often requires a loan. The loan then reduces the profit, and if there is no increase in value in sight, a renovation may not be a sensible idea at all.
The problem with investing in business premises today is that their profitability is not always guaranteed. Online shopping keeps growing, and there is not such demand for physical shops as there used to be.
The challenge with logistics centres is that they have to be extremely modern for the investment to be lucrative.
In the case of healthcare properties, locality is of utmost importance for the profitability of the investment. Healthcare properties in rural areas will become redundant before long, as the number of elderly people declines and young people move to growth centres. If there are fewer senior citizens than there are beds in a healthcare property, it becomes unnecessary and thus valueless.