- Target average gross rental yield 8%
- Financing for 50-60% of purchase price. Interest rates from 3% to 6% for asset-by-asset non-recourse financing dependant on the property and location.
- Gap between financing rates and yields enables attractive net rental yields. Targeting 7-11% annual cash flow and 11-15% net rental yield.
- Annual returns of 20%+ likely if economy keeps improving pushing cap rates lower and rents higher.
- Even without cyclical economic recovery, attractive returns are achieved from rent alone.
*Target returns are not indicative or actual or future returns
Small Ticket Size
- Target ticket size of £1-10m
- Substantial illiquidity premium and limited competition
Top 10 Cities
- Target location mid-to-large-sized regional cities. Long term viability of the location not in question
- Top 10 cities: Birmingham, Bristol, Leeds, Liverpool, Manchester, Cardiff, Sheffield, Newcastle, Edinburgh and Glasgow
Grade A or B Buildings
- Target buildings are typically 5-15 years in age with desirable exterior, modern open plan interior, raised floor & suspended ceiling
- Buildings this age are not expected to require any substantial capital expenditure for another 10 years and are attractive to tenants
CBD or Fringe City Centre
- Central Business District opportunities attractive in smaller towns
- Fringe city centre opportunities in large cities still attractive. Grade A CBD offices are becoming expensive in larger cities
Short to Medium Term
- Substantial value increases are currently possible when tenancies are renewed or new tenants are found
- Targeting an average of 4-6 years to first break or lease expiry
- Asset management focused on lease renewal and break removal negotiations