Residential Letting & Property Management
Overview
Viability, particularly in Multi-Family has been the unsurprisingly topic of conversation for a number of months now whilst interest rates remain at their current levels. Single Family Housing has, however, managed to carve out its own little niche over the last few quarters as unfavourable tax conditions and rising interest rates have squeezed out housebuilders’ more traditional routes to market. This has left the road open for a number of institutions with more favourable capital to agree deals with a number of national housebuilders.
The fact that the residential market has been able to weather these prolonged market conditions suggests confidence should be high in what is no longer simply an alternate investment opportunity.
Who is Active / Headline Deals
It has been an exciting last quarter for Allsop as we have launched 6 separate Single Family Housing schemes for the likes of Packaged Living, Kennedy Wilson and Urban Vision. Market sentiment is clearly strong as has been no surprise to see our friends at Packaged Living making further acquisitive deals in Cambridge and Milton Keynes.
Further Single Family Housing deals involving Vistry Group’s portfolio sale to Blackstone Real Estate and Regis Group for £580M as we as Placefirst’s partnership with Miller Homes underline the resilience of the sector.
In terms of Multi-Family our client Starlight has also announced deals for 232 multi-family unts in Dartford and 111 units in Leeds. Heim Global Investment Partners forward funding of McLaren Living’s BeckYard, Leeds a 375-unit BTR scheme also completed in the last quarter with Allsop advising McLaren.
Direction of Travel
In terms of SingleFamily Housing we believe the proof of concept stage has likely arrived for many UK housebuilders, what might have been seen as a nice stop gap as they waited for market sentiment to improve has for some at least begun to take the shape of a viable alternate profit centre. One which can easily sit alongside S106 commitments and open market sales. A valuable means of kicking off a site SFH can provide welcome cashflow but also help provide a scheme with an identity much quicker.
Heavily amenitised Multi-Family assets with strong, experienced development partners will continue to be attractive as they always are but I would also expect to see further divergence/variation in BTR typologies as BTR Lite begins breaking through. As we see rental ranges expand but the desire for a superior (in comparison to traditional PRS) product not necessarily diminish I would expect to see BTR Lite schemes become more prevalent as the market seeks to find ways of making schemes viable in the current economic climate.