{"id":864,"date":"2015-08-10T11:36:58","date_gmt":"2015-08-10T10:36:58","guid":{"rendered":"https:\/\/blog.propertypartner.co\/?p=864"},"modified":"2020-10-22T15:07:34","modified_gmt":"2020-10-22T14:07:34","slug":"how-we-select-properties","status":"publish","type":"post","link":"https:\/\/www.londonhouseexchange.com\/blog\/how-we-select-properties\/","title":{"rendered":"How we select properties"},"content":{"rendered":"
How we select properties<\/div>\n

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.<\/p>\n

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).<\/p>\n

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.<\/p>\n

Deep industry knowledge<\/div>\n

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\u2019s most experienced residential property professionals<\/a> 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.<\/p>\n

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.<\/p>\n

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.<\/p>\n

The Economic Perspective<\/div>\n

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\u2019s therefore important that we look to balance income and capital returns when we choose our properties, to maximise the \u2018total returns<\/a>\u2019 that this combination can bring to our investors over time. Maximising just one or the other may result in poorer returns overall.<\/p>\n

An example that may surprise many of you, is central London. London\u2019s capital prices have grown significantly, and rental yields in certain areas have been compressed as a result. For example, yields in certain \u2018prime central\u2019 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\u2019s target rate for inflation, and also above medium term interest rate expectations, and therefore an acceptable reward for capital price volatility.<\/p>\n

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).<\/p>\n

For more data on the capital returns to date for our properties, see the table titled \u2018Latest Valuation for each Property\u2019 in our transparency blog, ‘Open House’<\/a>. (Be sure to read the latest version).<\/p>\n

The Property Perspective<\/div>\n

When selecting properties, we focus on investment types that we see as growth opportunities – both in terms of capital returns and rental income.<\/p>\n

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.<\/p>\n

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.<\/p>\n

Conclusion<\/div>\n

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.<\/p>\n

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.<\/p>\n

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