View from our project The Legacy at Millennium Park
I’ve recently returned from a two-day trip to Chicago to meet with some of our business partners there and get a better feel for the market. This was my first time in Chicago and I was really blown away by how vibrant and alive the city is. I could really wax lyrical about the culture and lifestyle, which is pretty special, but on the very long flight to Dubai that followed my mind was racing at the investment potential of this market.
Chicago is a perfect example of the IP Global value proposition – a hidden gem in the world of property investment, a market to which investors are only just beginning to pay attention but which has such strong potential for growth.
During my time there I was able to view a number of our previous Chicago projects: 235 Van Buren, 1345 Wabash, Legacy and Flex House. Frankly, I was shocked at the quality and size of the apartments you get for the price.
Chicago is the third-largest city in the world's largest economy, it's one of America's cultural capitals, and yet you can buy a modern town home in a rapidly gentrifying area for USD230 per square foot (Flex House, see image below), a new-build condominium unit in the city’s second-fastest growing residential area for USD400 per square foot (1345 Wabash), or a high-end luxury condo unit with sweeping lake views and abundant amenities for under USD700 per square foot (Legacy).
The recently completed Flex House
In addition to this, Chicago units managed by our preferred lettings and management partner Complete are 100% tenanted (with the exception of the only recently completed Flex House), and we’re seeing rental yields consistently delivered in the 6-8% gross range.
We’ve been talking about Chicago for a little while now, and we’re definitely starting to see a wider increase in interest in investment in the city. Since we first entered the market in July 2013, average condominium prices have risen 11%, while prices at our most recent Chicago project have risen 5-6% since February. That steady, secure and accelerating growth is exactly what we look for in new markets, and with prices still 19% below peak there’s definitely still a long way to go in terms of growth potential in this town.
We’re really committed to investing in Chicago over the next year – this is a city that’s ready for key market status for property investors around the world, and I think investors will be very pleased with the opportunities we have in the pipeline for the rest of the year and 2016.