Let me share with you a rather odd story regarding two of my landlords who I have been speaking to this week. One has a 1 bedroom apartment in Empress Court and called me to discuss his next investment. He pointed to the Reliance Way development in Cowley as a possible location for investment. Later that week another of my clients who owns a property in Reliance Way expressed and interest in securing a property in Empress Court. 'What are the chances?!' I muttered to myself, but it did get me thinking about these two giants of the lettings world and how they compare. My findings were interesting.
My client paid £236,000 in 2011 for his 1 bed on Empress Court, in Oxford city centre. At the time the rent was £1125 per calendar month which gave him a yield of 5.7%. Fast forward to present day and the apartments are now going at £300,000 or more with the typical rent now at £1250 per calendar month. His yield now sits at 5% and the property has appreciated by 21.34%.
My landlord who owns a 2 bedroom apartment on Reliance Way, Cowley purchased in 2011 for £249,950 commanding a rent of £1050 per calendar month giving him a yield of 5%. Moving on to present day his apartment would now fetch approximately £280,000 at a rent of £1200 per calendar month with an annual yield at 5.1%. It's capital growth during this time is 10.74%.
An argument could be made for both. They both command strong yields and both show good sustainability but in this head to head, the city centre prevails (just)!
If you would like any more information about these developments or investment advice in general then please feel free to visit me in our office at 31 Woodin's Way, Paradise Street, Oxford, OX1 1HD or please give me a call.