It is very possible for SA property groups to find success in US6th August 2020
Published on www.bdlive.co.za - Article by Alistair Anderson
It is very possible for SA property groups to find success in US, says Stonewood
The continued success of Stonewood Alchemy Real Estate, even during the pandemic, suggests that more SA property groups should have invested in the largest real-estate market on earth, the US.
The only JSE-listed property fund with exposure to the US is Emira Property Fund. It owns stakes in grocery-dominated shopping centres in states including Florida, Texas and Ohio. Most SA property companies will tell you that the US is very difficult to compete in and time-zone differences between SA and the US cause too many headaches.
But private group Stonewood, which owns long-stay hotels, says it is very possible for SA property groups to find success in the world's largest economy.
Stonewood's founder and director, Eldon Beinart, defines a long-stay guest as someone that takes a room for 30 days or more.
“We have a large number of guests that stay with us for more than six months,” he says.
Stonewood currently owns 31 properties operating in the extended-stay segment. It has another 24 properties under contract with 10 ground-up developments in progress. The total gross value of the entire portfolio once complete, which will be in the first quarter of 2021, will be about $400m (R6.9bn).
The company has enjoyed new demand for its products as some Americans who have lost their jobs in the country's economic lockdown or who have been furloughed and are waiting to see if their job losses will become permanent, have been renting long-stay hotels until they can finalise their future plans.
“These Americans aren’t unemployed and living on the street. Rather, they have been absorbed into the social security net,” he says.