Is the face of HMOs changing?
As the private rented sector expands into larger and more impressive projects, we are also witnessing change in smaller scale schemes and indeed, the HMO sector.
Historically the bedsit homes of multiple occupancy have been fairly low lost, poorly managed and landlord friendly, but this is set to change. Overseas investors are now targeting small HMO portfolios, which can be acquired, refurbished and centrally managed professionally in a fund structure.
Manchester based Craigleith Property Group, works with a number of overseas investor partners and are witnessing increased interest in the high-yielding but “less premium” end of the private rented sector.
“As a Group we specialise in de-risking large scale residential projects across the UK by introducing exit partners. We have a strong panel of international investor groups actively looking to invest in residential schemes, either through a forward fund, forward commit or joint venture deal structure.” Commented Mark Antscherl, CEO, Craigleith Group. “Investor appetite has continued at a pace throughout the lockdown period and we have opened up new areas of investment, including an interesting new requirement from a Far East based investment house looking to acquire small HMO portfolios of between £1m and £4m.”
With an initial £50m to deploy, Craigleith’s investment partner has a clear vision of streamlining the business process by centrally managing small portfolios through a fund structure.
Antscherl went on to add, “This is certainly a move away from our typical 100 unit plus projects in core city centres, but it does represent a strong investment case in a sector that is ready for real change”.
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