Billions pumped into property

IRISH investors are turning to property, not just as a solid long-term investment, but for pension purposes.

Last week, it emerged Irish property speculators pumped €5 billion into commercial property, the bulk of it in overseas markets.

Some argue property is a medium-low risk, depending on location, and has outperformed equities in recent years.

However, the trend is moving back towards equities to some extent this year, with punters opting to put more of their money into stocks and shares as equity returns start to gather momentum again.

On the pension question, an Irish firm has been pushing out the boat for the past three years and at this point has €150 million invested in properties in Dublin, Cork and overseas on behalf of clients.

Finance Life, founded three years ago by Eamonn McGrath, has moved in to fill the need for the pension investment outlet.

Its latest investment offering is a $63 million US property scheme geared to deliver individual investments that offer commercial yields and dollar exposure.

The property is Fitzpatrick’s Hotel in Chicago and investment opens on July 25.

Mr McGrath concedes it is not for everybody, but said in the past few years the performance of property has caught the imagination of some investors.

In fact, last year, property attracted total investment of €350bn across the globe, as the quest for good solid investments drove investors to look beyond equities out of favour since the 2001 dot.com bubble burst.

Finance Life, in conjunction with Hibernian Investment Managers, has been glad to facilitate the demand in the Irish market for such investment options.

Finance Life says, that on past experience, it expects its 204 condominiums in Fitzpatrick’s Hotel on the so-called “magnificent mile” in Chicago to sell out quickly given the entry threshold of €100,000 in equity.

The pension-backed investment will also, however, require a monthly contribution of €1,000 a month into the investor’s fund.

Being brought to the market by Finance Life, the property will be managed under a 20-year deal by the Fitzpatrick Hotel Group.