Due to creative structuring and separate account mandates the gross asset value of the portfolio under management is now around £500m.
“The way we work is straightforward. As long as the bricks and mortar of the investment opportunity fit our criteria we can invest pretty much anywhere in the capital stack with the exception of the senior debt which is generally too low a return for our expectations. We can invest by ourselves or if appropriate with a partner. With a partner we can co-invest side by side or we can be the majority equity and they can be the junior equity. We can be 50:50 or we can be the mezzanine debt. In America they like to call it ‘structure agnostic’. “First and foremost for us are the fundamentals of the property, if that makes sense we then look at how we invest in to the opportunity’”
With a portfolio of 1.5 million sq ft of offices under management within 30 minutes of their Soho office, it’s clear that Rackind and his colleagues are big fans of the capital.
“We are big believers in London. Why? You have got proven GDP growth, you have high employment levels, and you have got employment growth. You still have a limited supply of new office space, and you have a restricted supply of finance for the more challenging investment opportunities.
“So we believe that there is greater economic certainty in London/South East which means that compared to perhaps other parts of the UK there is greater occupier liquidity for leasing and investor liquidity for the realisation. On a risk adjusted basis we feel that investing to create value through
‘hands-on’ asset management is more attractive than just buying for ‘aspirational recovery’.
“Are we big believers that the recovery is spreading to Manchester, Leeds, Birmingham, Bristol and Newcastle? No, not to the extent that investor sentiment is pricing the risk. I am from Manchester originally and I still have private interests up there. But when I travel there and talk to my friends who run their own local businesses and walk around the centre I can see it’s still very, very tough in the region, particularly in the Grade B market.
“The office market in London has completely different dynamics to that of the provinces. Actually it’s quicker and easier to get to Paris from London than it is to get to Manchester or Leeds. In fact, I would rather be investing in Paris which is the largest office market in Europe than in Manchester because in a downturn you know you have liquidity both from an occupier and investor perspective.
“That’s not to say you can’t make money in the regions but when you have a compact team
focused on real “hands-on” asset management you have to be able to be in front of your tenant within half an hour.”
Accordingly, Wainbridge is now in the process of putting in place a new vehicle which will again be a London-only, “value-add” office fund. The aim is to raise around £200m, but ultimately Rackind remains primarily focused on the ‘user experience’ for the investor.
Meanwhile, back at One Strand, letting agents, Colliers International and JLL, have let 27,779 sq ft to Braemar Shipping for a new HQ.
“Projects like the transformation of One Strand are the best examples of why we are being successful in the market: we can mix and match institutional experience with private equity, development with finance, put it all into one wrapper and above all make complex projects simple for the investor.
“You can be the best real-estate operator in the world, but if you can’t analyse an opportunity and report in a way that makes it simple for your investor then you have lost them.”
COLLIERS.COM 29
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40