Saturday, 23 July 2016

Raviv Dozetas : A look at 3 Private housing companies

The following housing companies have been selected as a model of what’s possible when large corporate bodies adopt the approach of institutional commercial property investors, each of these companies owns and rents out 1000s of units covering many acres of land, many buildings of theirs are in the value range of hundreds of millions of pounds price bracket each. And collectively the combined values would constitute enormous financial power capable if channelled correctly in correcting single handily the UK housing crisis.
They represent a new differing model that traditionally these sorts of companies have shied away from, and instead opted for the more immediate profits of build to sell.or required the long term rental income of long term commercial leases to blue chip companies, to justify the outlays involved of these scale of investments.
Essential living.
Essential living is UK based company that specializes in the construction of large scale multi storey apartment blocks for rent only. The company has around 12 buildings as described on their website, and estimates of their rental units are that they are in excess of 2500 rental units, they have future plans for continued aggressive growth, by acquisition of new sites and construction of their own sites.
Due to their high level of liquidity, theyhave recently announced their own internal development arm, they have done this to mitigate risk factors, and are aiming to reduce as much as possible on site trades and labour, this allows them to have a level of certainty in the outcome of their investments as opposed to projects potentially stalling or overrunning on costs due to these factors.
A further advance by the EL group is the announcement that are to produce as much as possible of their construction off site, employing the efficiency of factory produced components.
An important consideration in Essential Living is that they are redefining the rules, previously all attempts at a project of this size almost relied exclusively on external contractors, via almost exclusively external procurement processes, but EL must be seen to writing their own outcomes, the location of these buildings is surprising as the rental income is lower than a commercial property of the same size would produce. But this clearly demonstrates that build to rent models are scalable even in the toughest environments, and correctly funded and managed produce the desired investment returns, and most importantly the required units for rented accommodation.
They must therefore be seen to be engaging with local planning authorities and that local planning authorities are cooperating with operators of this nature.
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