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23-Feb-2010

Confidence in real estate as an investment vehicle is high this year, particularly from institutional investors.

Full Speed Ahead for Property Investment

01 July 2009

An essential ingredient to successful property investment is communication. After all, the easier a location is to reach, the more attractive it becomes to both tourists and relocators. Just over a decade ago, low-cost airlines opened up previously little-known areas of Europe to property buyers and tourists. Now, it's the turn of high-speed trains. However, unlike airline routes which come and go, trains are here to stay.

Like airports, train stations have the knack of putting an area on the map. A new train station in a town or city opens up the destination to visitors and new residents. Unsurprisingly, a direct side-effect of high-speed trains is a rise in property prices, which can be as high as 40% in some cases.

Europe's high-speed rail network is expanding fast. France and Italy, the pioneers behind trains that whisk you from one location to another, have the largest networks. Journey times by high-speed train are generally half those on conventional train and far quicker than by car. Paris-Nice on a French TGV takes just five and a half hours, while Rome is only an hour from Naples in the comfort of an Italian TAV.

Spain and the UK bring the latest arrivals to the high-speed train scene. Spain's most recent additions to its AVE network are Malaga and Barcelona - the direct train linking the two cities (some 1,000km apart) takes under six hours. AVE lines are currently under construction in most of Spain and the Spanish government has the ambitious objective of bringing a high-speed station within 50km of every Spaniard by 2020. In the UK, the high-speed network is under development in the south-east - the journey time from Ashford in Kent to central London has just been more than halved with the new high-speed train link. Busy commuters now find themselves in London in 37 minutes instead of the original 80.

The advent of Eurostar has brought France and the rest of the continent considerably nearer to the UK and now it's feasible to travel quickly and easily by train across and up and down Europe. While high-speed trains might be fast, they are not always a substitute for planes. Train tickets are often more costly, although low-cost fares are available, particularly if you book online and in advance. But trains have the big advantage of taking you right into the heart of a city - perfect for the time-starved commuter or tourist and by extension, the property investor.

High-speed train projects are a major undertaking and infrastructure takes considerable time to come to fruition, an advantage for property investment since you have time to research the market and choose the best property. However, bear in mind that a high-speed project is sometimes just that - a project. On the other hand, those projects which are approved at all appropriate levels have the potential to bring huge prosperity to the region and that includes high returns from property.

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