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Residential Panel ERES. Dr Karen A Sieracki MRICS Visiting Professor University of Ulster Director, KASPAR Associates London 5 July 2013. Introduction UK Residential. Look at the UK Been some institutional interest State of the market – demand, supply, performance Issues. - PowerPoint PPT Presentation
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KASPAR Associates Ltd
Residential PanelERES
Dr Karen A Sieracki MRICSVisiting Professor University of UlsterDirector, KASPAR Associates London
5 July 2013
KASPAR Associates Ltd
Introduction UK Residential
Look at the UK Been some
institutional interest State of the market –
demand, supply, performance
Issues
KASPAR Associates Ltd
Residential Vehicles and Capital
Capital raising Jan-May 2013, 2 funds closed total of £455m (23%) out of UK total capital raised £1.94 bn
Possibility of PAIF structure No residential REITs despite trying EG Blackrock in US Single Family Fund 17,000
properties in 12 US markets, $3bn cost + 10% purchase price for refurb, LTV 66%, 20% IRR 5 yr hold
KASPAR Associates Ltd
Total Return UK Residential
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
Total Return UK Residential and All Property
ResiCL ResiStudent HousingAll Prop
5 pa
Source: IPD, PMA
KASPAR Associates Ltd
Capital Growth UK Residential
Source: IPD, PMA
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
-40.0
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
Capital Growth UK Residential and All Property
ResiCL ResiStudent HousingAll Prop
% p
a
KASPAR Associates Ltd
ERV Growth UK Residential
Source: IPD, PMA
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
ERV Growth UK Residential and All Property
ResiCL ResiStudent HousingAll Prop
% p
a
KASPAR Associates Ltd
Income Return UK Residential
Source: IPD, PMA
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Income Return UK Residential and All Property
ResiCL ResiStudent HousingAll Prop
% p
a
KASPAR Associates Ltd
UK Residential
Acts as a capital play, not income Valuation on vacant possession High management cost and special skill set required Lack of availability of product to get economies of scale Could link with a homebuilder (eg M&G and Berkeley
Homes which was a sweet heart deal) Need to “build to let” so valued on income Why not special zones for rented housing UK housing market in a bubble, Central London rents
falling Government schemes
KASPAR Associates Ltd
UK Residential
Demand for renting from inbetweenies Affordability to rent and/or buy £4 trillion market, larger than the commercial stock of
£280bn Supply usually individuals doing buy to let single property Lack of modern space
KASPAR Associates Ltd
UK Institutional Requirement
Need size, scale and location Private rented market fragmented with buy to let owners Quality of stock and energy efficiency Have to go out and find it for what return – commercial is
easier
KASPAR Associates Ltd
UK Residential– Trophy or Trash?
KASPAR Associates Ltd
UK Residential
So why bother?Can make more money elsewhereBottom line for investors and the business
