Upton Prowse

Unlocking Investment Potential: Insights from H1 2024 The residential market in the first half of 2024 has been predictably unpredictable.   The market sentiment seems to change month by month and week by week.  Although frustrating at times it does present opportunity.  Below we share a few of our key insights from the first half of the year. 1.     Early Investment Consultancy in Development Developers continue to use the same playbooks when designing residential schemes and could end up losing significant value if the schemes are then sold to investors.  Assuming residential development is simply designing good quality homes is a mistake in today’s market.  Selling to an individual homeowner or an individual investor is very different than selling to an institutional investor looking at acquiring an entire block or blocks and they have fundamental key differences.  Small differences have big financial impacts. Early investment consultancy advice at the planning and design stages will make a significant difference here. 2.     Effective Pricing Strategies Pricing remains a key driver for success and ultimately achieved value.  Effective and strategic pricing strategies that attract initial interest either from first time buyers or investors results in more value achieved overall.  We notice a number of major developers have zero pricing strategy and are content to price property at its fullest from day 1.  This typically has the impact of requiring larger and larger discounts over time, to combat slowing sales rates and effectively results in a bigger discount needed for investors.  A comprehensive and strategic pricing strategy from the outset is essential for ensuring that properties don't linger on the market and lose value. 3.     Maximizing Value through Design and Specification The difference between closing a deal and not in the last 18 months has often come down to minute margins. Understanding where this extra value for both sides can come from is crucial.  For example, finding the best layouts to maximise rental value. Removing certain key spec features that matter for individual homeowners but are not necessary for rental tenants. Optimising deal structure can make all the difference on doing a deal or not doing a dea. Incorporating all these insights can help unlock the full investment potential of residential developments. #ResidentialDevelopment #InvestmentStrategies #H12024Insights #RealEstate #PropertyDevelopment

Upton Prowse Records Busiest Ever H1 with Deals Totalling Over £130m. Upton Prowse, is pleased to announce its busiest ever H1, having agreed a further four new deals that cumulatively exceed £100m.  This achievement underscores the firm's commitment to be a leader in the residential investment market. "As we reflect on this half year, it's clear that our hard work and approach is paying off," says Matthew Comer. "Going into H2 with a significant pipeline of deals in legals, is not just a testament to our dedication but also to the confidence our clients place in our ability to deliver. Every deal presents unique challenges at present but we are working hard to close these all soon, this is an exciting time for Upton Prowse, and we are keen to maintain this momentum. As we enter H2 we expect sentiment to remain positive, with the new election result and summer months acting as a momentary pause and catalyst for the market to continue in earnest.” These deals span a variety of different investment types but are all residential led, reflecting Upton Prowse’s commitment to keeping things specialised. James Upton-Prowse says: “An area of our business that we are adding significant value to our clients is in early development consultancy.  Mapping out schemes that would best fit institutional capital.   Capital is then able to be deployed at best value for sellers and on the most fit for purpose investments for buyers.  This year we are seeing a number of developers run into difficulty because of a lack of foresight in design and orientation at the outset which could have easily been avoided.” For further details or to discuss how we can help, please get in touch. #prs #h1results #keepitsimple #btl #btr

We are delighted to announce the successful completion of a high-quality residential portfolio in West London. Acquired by Pictet Group and their JV partners Pinnacle Investments, the residential portfolio consisted of 73 newly built apartments across two residential blocks, totalling circa 50,000 sq ft within a multi-phase regeneration scheme. The scheme received an EPC B Rating and each of the apartments include private outdoor space, bicycle storage, access to communal gardens and concierge service. Upton Prowse acted for the sellers in this transaction. James Upton-Prowse, comments: “We are thrilled to have completed on a major residential investment deal at the end of Q1.  This is another good signal for the market; we are witnessing a turnaround in sentiment but with limited newly built stock available. The residential investment market continues to be a priority for many institutional investors and the right opportunities are trading well.” Ed Jackson, head of UK real estate at Pictet Alternative Advisors, said: “With this transaction, and further acquisitions, we are aiming to create a portfolio of institutional quality and size in one of Europe’s strongest investment markets.” Please contact James Upton-Prowse or Matthew Comer for further information.

We recently hosted an in-depth conversation with a few leading Single-Family investors to explore their approach to deal analysis and their short and long-term strategies. This discussion shed some light on the inner mechanics of a few of the SFR powerhouses, equipping us with valuable insights to enhance our ability to advise.   Key Insight:    Scaling quickly and transitioning to in-house management significantly boosts efficiency and profitability and long-term value. The cost savings between managing properties internally versus outsourcing exceeded expectations. When you capitalise this net cost saving by current cap rates then scale and achieving scale quickly can surpass even the entry price (within reason) on list of priorities.   There is still a prevalent multifamily mindset in SFR acquisitions, agile investors therefore can find ample opportunities to thrive.   With at least three new major investors entering the scene, the market is beginning to adjust, leading to more sustainable longer term pricing levels for developers.   Our good friend Richard B. CEO of the UK Single-Family Association shared his thoughts with us, stating: "The two main barriers to growth in the Single-Family Rental (SFR) sector have been questions over scalability, and concerns about operational management.  Now that we have more than 10,000 operational SFR homes in the UK, Institutional capital has learnt that SFR is scalable, but the manner in which scale is achieved is fundamentally different. Dictated by significantly lighter density, it’s all about more smaller schemes in many more locations.  The good news is that we can build houses anywhere in the UK and are not restricted by the same criteria that cramp multifamily development. James Upton-Prowse is right to highlight the “multifamily” mindset. When it comes to operational management, SFR and multifamily practices cannot be conflated. Whilst a customer centric approach is common, the differences in density, scale and amenity require a different approach. This is generally now well understood and now the two main barriers have been largely swept aside, it looks like SFR will enjoy exponential growth over the next five years during which time it is likely to become the dominant element of the wider BTR sector."  

Upton Prowse are delighted to launch an excellent unbroken residential freehold investment within the thriving Cathedral and University city of Worcester. The property offers 105 private residential units as well as 50 parking spaces. Furthermore the property has a large ground floor amenity space ideally suited for an impressive entrance and concierge desk, co-working space/resident’s lounge. This asset is ideally suited for investors looking to acquire new and unbroken apartment buildings to provide strong operating income. for the private rented sector within an area with limited local competition and quality transport links. Nestled between Bristol, Birmingham and Oxford, Worcester is perfectly positioned to take advantage of these established markets. Please contact Matthew Comer or myself if you are interested and would like to discuss further. #residentialinvestment #multifamily #btl #longterminvestment #regeneration

Upton Prowse are delighted to launch an excellent unbroken residential freehold investment within the thriving Cathedral and University city of Worcester. The property offers 105 private residential units as well as 50 parking spaces. Furthermore, the property has a large ground floor amenity space, ideally suited to create an impressive entrance with concierge desk, co-working space/resident’s lounge. This asset is ideally suited for investors looking to acquire new and unbroken apartment buildings to provide strong operating income from the private rented sector within an area with limited local competition and quality transport links. Nestled between Bristol, Birmingham and Oxford, Worcester is perfectly positioned to take advantage of these established markets. Please contact Matthew Comer or myself if you are interested. #residentialinvestment #multifamily #btl #longterminvestment #regeneration

Exciting new instruction about to launch... 🚀 Here's a sneak peak... Reach out to James Upton-Prowse or Matthew Comer for further information. James - M: 07968550301 E: james@uptonprowse.com Matt - M: 07725939567 E: matt@uptonprowse.com #forwardpurchase #opportunity #btr #prs #multifamily #fundmanagers #pensionfunds #familyoffice

We've recently been touring a lot of the East London hotspots and are completely blown away by what we are seeing. The underlying value being baked into these large regeneration areas is truly astonishing. During the growth phase it's quite hard for investors to really see the value proposition, but once these areas hit maturity expect prices to really accelerate. Look at Kings Cross, Nine Elms and parts of Royal Wharf etc as good recent examples of this. The Office for National Statistics data highlights that by population growth, the 5 fastest growing boroughs are all within East and South East London. 1.) Tower Hamets 2.) Barking and Dagenham 3.) City of London 4.) Newham 5.) Greenwich We are marketing a number of excellent opportunities that are within these boroughs so if East or South East London is an area you want to gain exposure too then please reach out to Matthew Comer or I to discuss further. #eastlondon #census #realestate #London #btr #multifamily #infrastructure

Extremely pleased to be able to announce this exciting news.... Upton Prowse welcomes Matthew Comer as Equity Partner to drive BtR sector growth. Matt arrives after spending nearly 10 years at JLL as a director in the residential investment and capital market teams. Matt's appointment as an equity partner underscores Upton Prowse's commitment to strategic growth in the Living Secrtor.   Known for his wealth of experience, work ethic and personal integrity, Matt's leadership is poised to drive Upton Prowse's expansion and benefit its clients. This is about harnessing the best people in the industry dedicated to achieving the best results for clients. Upton Prowse aims to be the go-to boutique independent agency for BtR and Private Rented Sector (PRS) sales in the UK. With Matt on board as equity partner, we anticipate an exciting phase of growth. Please reach out to arrange a call, coffee and catch up to discuss how we can help in 2024 and beyond. #newcareer #partner  #letstalkrealestate #buildtorent

Recently I caught up with a single-family investor who provided intriguing insight.  Remarkably, they maintain an average of well over 10 tenants per property, and have exceeded their first fund's (IRR) objective by an impressive 30%. In a notable development, Blackstone has finalised its second significant single-family transaction in recent months, acquiring Tricon Residential for a substantial $3.5 billion. When an investment firm like Blackstone considers investing in residential real estate, whether single-family or multi-family, they typically assess a range of long-term fundamentals.  These fundamentals help in determining the potential for sustainable growth, stability, and profitability.  Here are just some of the factors we believe have attracted them: ** Historic Wealth Transfer: ** The next 25 years will witness the largest wealth transfer in history, with an astounding £100 trillion shifting hands from the affluent boomer generation to their successors. This shift is poised to significantly bolster real assets, particularly benefiting the residential sector. ** Technological Advancements: ** Emerging, ground-breaking technologies are set to drive substantial innovation and wealth creation, contributing to global GDP growth. Additionally, these advancements are expected to lower the cost of goods and services, enhancing rent affordability and operational efficiency. ** Cultural Shifts: ** A notable trend in home ownership is emerging among younger generations, with an increasing preference for renting driven mainly through affordability constraints.  This shift is likely to accelerate, offering favourable conditions for investors. ** Undersupply in Housing: ** The balance between supply and demand is a key determinant of real estate prices and rental yields.  The UK's housing market is characterised by a chronic shortage of supply, a condition that ensures continued high demand. #babyboomers  #millennials  #ukeconomy  #innovation  #technologyinnovation #culturalchange  #rentalmarket #singlefamilyrental #multifamilyrealestate