We see ourselves as having two tasks. Firstly, to give you the areas you want, and secondly, to overlay deep expertise, to enhance investment returns from those areas.
We ascertain the areas you want by asking you. A survey of our users saw over 1,000 responses, telling us loud and clear that you want us to focus firstly on London, secondly the South East, and then on to other regions of the UK (and internationally).
Then comes the task of overlaying deep expertise, with a view to enhancing investment returns from those areas. This article explains how we do it.
When you invest with Property Partner, you invest in properties specifically chosen for their potential by our Director of Property, Robert Weaver. Robert is one of the UK’s most experienced residential property professionals and was formerly the Global Director of Residential Investment at RBS. He is a Fellow of the Royal Institution of Chartered Surveyors (RICS), was the keynote speaker at their 2014 residential property conference and sits on the residential committee of the British Property Federation.
Property Partner also accesses research from third parties, such as the Independent Data Bank (IPD), JLL, Knight Frank and Savills. Our investors benefit from all of this knowledge.
Robert searches for property differently to the average buyer, focussing on properties that will give the best returns. To do this, he overlays two types of insight: the economic perspective, and the property perspective.
One of the main benefits of property as an asset class is that it provides a combination of income (from monthly rent) and capital returns (from movements in the property market). Historically, the majority of residential property returns have been delivered through capital appreciation. It’s therefore important that we look to balance income and capital returns when we choose our properties, to maximise the ‘total returns’ that this combination can bring to our investors over time. Maximising just one or the other may result in poorer returns overall.
An example that may surprise many of you, is central London. London’s capital prices have grown significantly, and rental yields in certain areas have been compressed as a result. For example, yields in certain ‘prime central’ London areas such as Knightsbridge or Kensington are lower than we find acceptable. For us, the dividend yield needs to be at least 2%, so that it is in excess of the Bank of England’s target rate for inflation, and also above medium term interest rate expectations, and therefore an acceptable reward for capital price volatility.
The average dividend yield on our London properties is around 3% (this yield is based on rental income, with deductions to cover costs such as maintenance, letting and insurance).
For more data on the capital returns to date for our properties, see the table titled ‘Latest Valuation for each Property’ in our transparency blog, ‘Open House’. (Be sure to read the latest version).
When selecting properties, we focus on investment types that we see as growth opportunities – both in terms of capital returns and rental income.
Good examples include areas benefitting from regeneration, value migration, or infrastructure investment (e.g. the Crossrail line that is set to transform London). We expect these areas to see strong capital returns and rental price growth.
At other times, we will use our knowledge and buying power to engage with more complex purchases, such as those with complicated legal situations. Price discounts for these properties can result in enhanced returns.
At Property Partner, we give investors what they want, with the added benefit of leading industry insights and decades of experience, all led by Robert Weaver.
We are mindful that the majority of residential property returns are typically generated from capital growth, and we curate properties accordingly based on a clear selection philosophy. We support this with specialist knowledge that allows us to engage in complex and specialist transactions, and also with the formidable buying power we have thanks to you, our investors.
The value of your investment can go down as well as up. Gross Rent and Dividends may be lower than estimated. You may have to wait until the next five year anniversary of the property’s listing on the Property Partner platform for an exit event. See Key Risks for further information. Property Partner does not provide investment advice and any general information is provided to help you make your own informed decisions. If you are unsure whether an investment is suitable for you, you should contact a financial adviser for advice. Property Partner is the trading name of London House Exchange Limited, which is authorised and regulated by the Financial Conduct Authority (firm reference number 613499).