Routes to Market

We are still very much in the development stage of both multi-family and single-family BTR. Whilst there have been some stabilised transactions of earlier first-generation stock, the number of stabilised BTR schemes remains low in comparison to demand. Most investors are long-term owners therefore it is unlikely that we will be in a predominantly stabilised transactional market for some time. As such the vast majority of transactions are still on a forward funding structure, albeit we are seeing an increasing number of Joint Venture arrangements being considered by developers as a way of overcoming some of the viability challenges that have persisted in recent years.

Most investors are targeting opportunities at scale which is more achievable in the MFH sector with a single asset acquisition. To support the functionality and amenity of an appropriately designed BTR scheme and target lot sizes, MFH schemes typically need to comprise at least 250 units in the regions and 100 units in higher value areas of London and the South East.

Opportunities that offer significant scale in a single SFH development are scarce. This is mainly due to access to appropriate sites and absorption considerations in more peripheral locations. Therefore, the best route to scale in the SFH market is honing relationships with developers that can offer a pipeline of suitable opportunities (usually housebuilders).

Image: TopHat Kitchener Barracks