investment

Investment

<h2><strong>London, 7<sup>th</sup> October</strong> &ndash;<em></em></h2><p>Annual investment in UK living real estate has exceeded &pound;10bn in the third quarter of 2022, putting living on track for a record year, despite global geopolitical and economic volatility.</p><p>Investors completed &pound;3bn in build-to-rent, student and healthcare transactions in Q3, bringing the year-to-date investment total to &pound;10.3bn, according to JLL.</p><p>This is a 47% rise from the &pound;2bn invested Q3 2021, as investors seek scale through larger deals, reflecting bigger assets, portfolios and higher values.</p><p>BTR quarterly investment has doubled year-on-year, rising to &pound;1.8bn in Q3, compared to &pound;0.9bn in the same period last year. There was a further &pound;0.8bn in purpose-built student accommodation and &pound;0.4bn in healthcare investment.</p><p>Investors across the combined living sectors funded 19,000 homes and beds in Q3 and 63,800 in over 200 deals in 2022. Further deals in legals and under offer would see this rise over the &pound;13.8bn record of 2021.</p><iframe src="https://flo.uri.sh/visualisation/11505276/embed" title="Interactive or visual content" class="flourish-embed-iframe" frameborder="0" scrolling="no" style="width:100%;height:600px;" sandbox="allow-same-origin allow-forms allow-scripts allow-downloads allow-popups allow-popups-to-escape-sandbox allow-top-navigation-by-user-activation"></iframe><p>The rise in investment reflects a sizeable uptick BTR deal size, as larger transactions see the sector rise to account for a larger proportion of total living investment, peaking at 60% of investment in Q3. The sector has accounted for almost half of
    living investment this year, at &pound;4.9bn, on course to top last year&rsquo;s &pound;6bn. </p><p>Excluding land deals and corporate mergers and acquisitions, the average BTR deal size has risen to &pound;127m, up from &pound;49m a year ago. In Q3, the largest living deal was Canada&rsquo;s Alberta Investment Management&rsquo;s &pound;283m purchase
    of Angelo Gordon&rsquo;s portfolio of five BTR schemes in Cardiff, Birmingham, Sheffield and Greater London. </p><p>Other significant deals include Round Hill Capital&rsquo;s &pound;165m forward funding of the Fairfax in Manchester&rsquo;s Piccadilly East. The purchase completed in August and Round Hill Capital said it aimed to &ldquo;unlock further opportunities in
    the coming months and years&rdquo;.</p><p>The growing wall of capital targeting the living sectors comes as economies across the globe struggle with high inflation and rising interest rates. The cost of financing puts pressure on investor margins and real estate transaction volumes.</p><p>Simon Scott, lead director for living capital markets at JLL, said: &ldquo;Although these transactions precede the recent volatility seen in the broader funding markets, the fundamental demand for quality rental housing stock remains at unprecedented
    levels and this is reflected in investor appetite for the product.</p><p>&ldquo;As we are likely to be entering another period of &ldquo;pricing discovery&rdquo; the lack of quality supply and viability challenges, combined with the underlying occupational demand should provide investors with continued confidence of the resilience
    of the living sector and particularly as a hedge to broader inflationary pressures.&rdquo;</p><p>Emma Rosser, associate director for research at JLL, added: &ldquo;A persistent lack of supply of quality rental housing is an ongoing issue for the UK, highlighted by recent rental growth and students and renters struggling to find accommodation. Long
    term investors are looking behind the current market turbulence to provide homes for that growing tenant base.&rdquo;</p><h3><strong>About JLL</strong></h3><p>JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing
    spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $19.4 billion in 2021, operations in over 80 countries and a global workforce more than 98,000 as of
    December 31, 2021. JLL is the brand name and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.</p><p>&nbsp;</p>

UK living investment tops £10bn in Q3

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UK living real estate investment exceeded &pound;10bn in Q3 2022, on track for a record year despite global volatility.

Annual investment in UK living real estate has exceeded £10bn in the third quarter of 2022, putting living on track for a record year, despite global geopolitical and economic volatility.

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<em>JLL tracks &pound;3bn in third quarter, putting living on course for a record year</em>

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            <p><strong>Leasehold Enfranchisement</strong></p>
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            <p><strong>Across London</strong></p>
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            <p><strong>30 units</strong></p>
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<h2><strong>Ambition</strong></h2>
<div>Resonance has created and manages twelve operational social impact investment funds, which focus on tackling some of the major societal issues in the UK such as homelessness, poverty, health and wellbeing and education. The client, Real Lettings Property
Fund, has sourced, purchased and refurbished a large portfolio of properties in the Greater London area. The Fund has leased these properties to homelessness charity St Mungo&rsquo;s Real Lettings team, who let properties to families and individuals
who may be at risk of homelessness. Real Lettings Property Fund seeks to provide investors with a commercial risk-adjusted return on their investment, including both rental yield and capital appreciation on properties.<br />
<br />
<p>The client wanted to optimise the tenure of the portfolio and reduce annual ground&nbsp;rent expenditure. Some apartments in the portfolio were owned on shortening leases and subject to a ground rent with future increases. The above had negative implications
for value, future marketability, and security for loan.<br />
<br />
</p>
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<h2><strong>How we worked together</strong></h2>
<p>Working with the client&rsquo;s portfolio manager, JLL explained the statutory rights available to the client as a leaseholder and identified those properties in need of a statutory lease extension.&nbsp; We formulated a phased strategy over a two/three
year period, prioritising where the cost and value implications were greatest.&nbsp; Our team also introduced the client to specialist legal advisors to work on the project.</p>
JLL&rsquo;s strategy advice was that the &lsquo;priority&rsquo; Year 1
phase should be those properties where the leases were close to 80 years unexpired, and the lease extension premium payable was at risk of doubling due to &lsquo;marriage value&rsquo; compensation, and the following phases should be those where the cost
implications were less acute. We undertook a process of inspections, research and property specific valuation reports, in accordance with the statutory valuation methodology, and following service of the notice of claim undertook the lease extension premium
negotiations for the client with the landlord&rsquo;s valuers.
<p>&nbsp;</p>
<h2><strong>Challenges</strong></h2>
<p>Some of the portfolio had been owned for less than two years, which is necessary under the qualification criteria for a statutory lease extension.&nbsp; Having reviewed the Land Registry information, we identified those properties and liaised with the
client and their legal team to ensure these lease extension claims were made at the correct time to avoid invalid claims and unnecessary costs for the client.</p>
<h2><strong>Achieved</strong></h2>
<p>Constant liaison with the client and their legal advisors was maintained to reach a successful outcome. JLL&rsquo;s expertise and experience provided the client with an achievable and time specific strategy to realise its goals with. Cost minimisation
was at the core of our strategy, at each stage of the process right through to the negotiated settlement. </p>
<p>Negotiated settlements have been successfully reached to agree the lease extension premiums on all cases in the project, being the least costly scenario for the client.</p>
<p><a href="https://residential.jll.co.uk/services/valuation-advisory" style="font-size:inherit;font-family:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;caret-color:auto;"></a><button class="Button primary"><a href="https://residential.jll.co.uk/services/valuation-advisory" style="font-size:inherit;font-family:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;caret-color:auto;"></a><a href="https://residential.jll.co.uk/services/valuation-advisory">Find out more about our services</a></button></p>

Lease extensions for an impact investment fund targeting homelessness

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An impact investment fund tackling major societal issues sought our assistance to optimise the tenure of their portfolio of homes.

An impact investment fund tackling major societal issues sought our assistance to optimise the tenure of their portfolio of homes and reduce annual ground expenditure.

<p>An impact investment fund tackling major societal issues sought our assistance to optimise the tenure of their portfolio of homes and reduce annual ground rent expenditure, through the negotiation of lease extensions on some of their properties.</p>

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