Assisting With All Our Clients Real Estate Needs
We were engaged by a Singapore based client to assist with two specific real estate needs.
Firstly, with the client’s frequency of travel to London increasing as much as his irritation of staying in hotels, he was keen to acquire a pied-a-terre in central London for him and his family to use.
Secondly, having recently had a liquidity event, he had a desire to diversify his wealth away from his existing financial investments and his own business, and develop a portfolio of commercial properties for the twin purposes of wealth preservation, and generating a sustainable stream of UK sourced income. In his mind this was a long term strategy that would aid him and his wife for when they send their two children to be schooled in the UK.
Finding Evidence And Market Data To Keep Clients Informed
For a while the client had toyed with the idea of buying a residential property in central London but had never been enthused by the options presented to him, whether at the weekend hotel exhibitions in Singapore, or by the plethora of agents that were flooding his inbox with ideas but with no focus. He thought it was all very impersonal. Upon our engagement, we took the time to listen to what the client and his wife really wanted, understanding amongst other things, the locations they liked, the style of property that appealed to them, the number of bedrooms and bathrooms they required, and how much they wanted to spend. The client was open to ideas as to location, and factoring in their two young children, we recommended areas such as Kensington, Holland Park, South Kensington, and Chelsea - all of which benefited from being within close proximity to central London, but with access to large open spaces, high class local amenities, and a choice of transport links.
Ahead of their arrival into London, we physically previewed over 40 properties on their behalf, many of which were being discreetly marketed, and not known to be available publicly, and shortlisted 12 properties which we knew comfortably met the client’s specific criteria. We arranged for a chauffeur to collect the client and his wife from the airport and arranged for their bags to be dropped at their Hotel (which we had arranged) and brought to the first property.
The car stayed with us all day and we viewed all 12 properties, with a break for lunch and a debriefing in the evening. One property stood out which we visited again the following morning and the client and his wife decided that was the property they wanted to acquire. Over night, we had prepared comparable evidence and market data to inform the client what we felt the market rate of the property was to aid us with our negotiation. We were in direct contact with the developer of this exceptional 3 bedroom apartment in Kensington, and negotiating on behalf of the client, we were able to take advantage of the developer’s desire to get one unit sold ahead of their launch, and negotiated a discount of over 12%.
Subsequently, the client wanted our assistance in finding finance to assist with the purchase of the property, recommendation of a solicitor to manage the conveyance process, appointing a surveyor to carry out a valuation and building survey, and putting in place the correct insurances. We managed the entire purchasing process on behalf of the client from start to finish, being their trusted advisor in London to look after their interests.
Regarding the commercial property portfolio, unsure as to how to deploy £30,000,000 into commercial real estate, the client gave us a mandate to devise a strategy and recommend options which delivered net yields of 4.00%-4.50%, focusing on Freehold assets with tenants who have strong (5A1) credit ratings. We recommended a strategy that would focus on affluent locations within Greater London such as Richmond, St John’s Wood, Kensington, Notting Hill and Kingston-upon-Thames; major UK cities such as Manchester, Leeds and Edinburgh; cathedral cities such as Winchester and Chichester, and Market Towns such as Harrogate, York and Bath with a focus on retail, office and mixed use (including residential) assets, with long unexpired lease terms, and low levels of passing rents, allowing room for significant rental growth.
We assembled a team of solicitors, tax advisors and corporate service providers, to implement the most appropriate ownership structure for the client, to ensure the acquisitions were made in the most tax efficient manner possible. Over an 18 month period we sourced 7 properties, of which all bar 2 were acquired on an off market basis, without the need to participate in a ‘best-bids’ process. The average lease length was 8 years, thereby providing medium to long term UK sourced income for the client, which we expect to increase at review, either by way of fixed rental increases inline with RPI or by open market valuation.
The client and his family absolutely love visiting London and staying in their pied-a-terre, whilst the commercial property portfolio is providing useful diversification away from his main business and financial portfolio, and will hopefully continue to provide steady capital growth and sustainable income.
“I just wanted to say thank you on behalf of myself and the entire family for what was, undoubtedly, the smoothest and most enjoyable real estate transaction we could have hoped for.”