We believe in investing in high yielding commercial investment property. When property values fall, yields increase and we consider buying. When property values rise, yields reduce and we consider selling.

1. When buying for income, sustainability of income is a priority.

2. Property is illiquid:

  • This illiquidity can be mitigated by rental income – liquidity through income.
  • Over the long term it is income and not capital value movements which largely determine total investment property returns (IPD: income contributed 95% of total returns over the 10 years to 31-Dec-2015 and 67% over the 35 years to 31-Dec-2015).

3. Capital preservation:

  • Capital is better protected if investments yield a high income. Income dampens capital value volatility.

4. A fundamental approach to investing:

  • Consensus may chase a particular investment theme but that does not justify it.

5. Flexibility in the light of market changes:

  • Largely exited the UK commercial property market in 2005, re-entered in 2009. We act dynamically.
  • Reversed asset management policy of waiting until lease expiry to renew leases following the onset of the credit crunch in 2008.
  • May 2013: Recommenced development activity in the UK in response to the introduction of Permitted Development Rights (PDR) and the boosting of demand for residential property with the “Help to Buy” scheme – achieved IRR of 98% for clients without leverage;
  • 2016: Varied PDR strategy to invest in offices for rental growth (as opposed to for development) due to PDR resulting in diminishing office supply / rising rents;
  • Deep expertise 2017: acquired an office park in Krakow, Poland, out of administration. Turnaround required, including resolution of legacy litigation;
  • COVID-19 induced crisis: Entered the crisis with a significant amount of cash, circa £23.6 million, following the sale of CH8.

6. An active approach to asset management (where possible):

  • Drive income and in turn capital values by hands-on property management, relying as much as is possible on internal resources.

7. Think from first principles