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Consulco - 7 Years in London
24 July 2017
The more things change, the more they remain the same
In 2010, the Directors of Consulco saw an opportunity to provide investments in the London property market to their clients. That year, Consulco Real Estate was founded in the UK headed by David King who had joined the team on the same year. David is an experienced property fund manager and together they have created a highly successful property investment business.
After three UK elections and the historic vote to leave the European Union, it is a good time to reflect on the successes of Consulco Real Estate and to look at what the future might hold.
Our strategy has remained consistent throughout the last 7 years with four core concepts:
London real estate has always been a quality investment asset type forming an integral part of wealth diversification and asset allocation strategies for professional and individual investors from all over the globe.
Our in-depth expertise and professional investment underwriting ensure that we acquire for our clients quality assets, with potential for growth, at the right price.
Our experienced commercial and residential real estate professionals develop and manage real estate portfolios for our clients by professional selection, acquisition, development and management of properties in London and Britain.
Our hands-on management approach and active management initiatives ensure that we maximize investment returns for our clients by adding value to our clients' real estate capital values and rental income.
Our network, reputation and track record ensure that we constantly source and analyse acquisition opportunities for quality income producing assets in London and the UK.
|We continuously successfully manage and launch London real estate funds, offering a rewarding relationship from which out high net worth clients can gain and prosper.|
Executing the Strategy
The Consulco Real Estate team correctly forecast that demand from tenants for well-located retail and restaurant units would grow from a relatively low base - allowing Consulco’s funds to ride the ‘coffee shop’ revolution that inner London has enjoyed. The type of properties acquired, typically converted Victorian residential, provide the ideal floorplates for the casual dining and take-out sector. Consulco buildings host many of the chains that have expanded rapidly over the past 7 years and which have driven rental growth eg Leon, Costa Coffee and Bill’s.
The portfolio now comprises 30 individual investment properties, located mainly in Soho, Covent Garden, Farringdon and ‘trendy’ east London - together these properties have a value close to £100 million.
Fund returns have been ‘turbo-charged’ by the selective acquisition of assets close to new Crossrail stations. Crossrail is a new railway line that will connect Heathrow with the West End, the City and Canary Wharf. It will transform rail transport in London, increasing central London rail capacity by 10% and bringing an extra 1.5 million people within 45 minutes of central London. As tunneling did not start until 2012, Consulco was able to acquire assets where the upside had not been fully priced in. Over 60% of investments acquired sit within 250 m of a Crossrail station - particularly Tottenham Court Road and Farringdon, but also Ealing, Paddington, Bond Street and Customs House.
But the Consulco Real Estate team does not ‘let and forget’ - instead, Consulco actively manages the properties it acquires. Where possible, Consulco will change tenants to those with a stronger financial base; extend properties to increase lettable floor space; change use to a higher value and refurbish to increase rental value.
At South Molton Street, Consulco secured vacant possession, changed the use of the upper floors to residential and added an extra storey. The team is currently on site at Charterhouse Street where it is splitting a pub into a separate ground/basement unit with independent flats above. The construction work involves a substantial basement excavation, rear extension and new top floor.
37 South Molton Street, London, W1K 5RJ
- Address: 37 South Molton Street, London, W1K 5RJ
- Tenure: Virtual Freehold 2000 year lease from 25/03/1922
- Fair Value: £6,860,000 at 17/11/16
- Area sq. m: 164
- Tenant: Orogold Cosmetics / Residential
- Rent P.A.: £246,000 (Com - £168,000 / Res - £78,000)
- Lease Start: 26/07/2012
- Lease Expiry: 25/07/2022
- Next Rent Review: 26/07/2017
A combination of a strong strategy, excellent stock selection, active asset management and judicious use of debt has resulted in impressive returns. The Hermes portfolio, acquired in 2010 and 2011, has generated average annualised returns of 30%, after all costs and taxes. The assets acquired have enjoyed yield compression and strong rental growth – over 5.5% per annum across the portfolio.
For more information, you may click here to download our Hermes 6 years track record 2017 brochure
For more information, you may click here to download our Consulco Capital Properties Portfolio brochure
A glimpse of our aquisitions
So what does the future hold?
It is difficult to forecast how the market will react once Brexit is implemented. However, Consulco has mitigated risk by holding assets in strong locations, popular with locals and tourists alike. The 2012 Olympic Games showed the attractions of London to a worldwide audience and visitor numbers continue to increase.
The acceleration of co-working, dress-down work and the widespread acceptance of coffee shop meetings is likely to fuel further demand for casual dining in units on busy streets.
The opening of Crossrail will add to the attraction and visitor numbers of key central London locations. Farringdon Station will be one of the busiest in the UK, connecting with Thameslink and the London Underground to provide links with outer London, the home counties, the City, Canary Wharf and London’s three main airports. When complete, Tottenham Court Road will see more than 200,000 passengers passing through the station every day.
Consulco has launched Sparta Capital Properties – a new vehicle that will build on the success of its predecessors.
To date, Sparta has acquired two investments in Ealing and Camden. Ealing, a west London suburb, will be served by Crossrail and Sparta has acquired a retail unit located between the train station and the shopping centre. Sparta has also acquired a restaurant in Camden located between the main retail pitch and Regents Park - this has significant development potential.
Consulco has reopened the fund to allow additional investors to participate in Sparta.
For more information, you may click here to download our Sparta Capital Holdings brochure
At the same time, Consulco Real Estate team is seeking further property investments and has created a strong deal pipeline.
For more information, you may click here to download our Commercial Real Estate Funds brochure
For further details about this exciting opportunity, please contact us at firstname.lastname@example.org .
Consulco is an independent trust services and investment management group operating since 1993 and managed by Marios Hajiroussos, Dmitry Khenkin and Elena Hajiroussou.
About this publication
This material is for information purposes only, it is subject to change without notice and it is not directed to any person in any jurisdiction where the publication or availability of the information contained herein is prohibited. It is not and should not be regarded as investment advice or as a recommendation for the holding, purchasing or selling of securities or other financial products or instruments and it does not take into account your specific circumstances or objectives. You are cautioned to make your own independent decision based on your own judgment and/or consult your advisors on the merits of the course of action you are considering taking, after evaluating all the risks pertaining to that course of action in conjunction with your financial situation and needs. While due care has been used in the preparation of any forward looking statements contained in this material, you should not place undue reliance on them as forecasts are subject to uncertainties outside our control, thus actual results may vary in a negative manner. Examples illustrated in this material are hypothetical, and although our track record may be disclosed, you must always take into account that past performance is not a reliable indication of future performance. Returns linked to currencies may increase or decrease as a result of currency fluctuations.
Consulco refers to one or more of Consulco Limited, a Cyprus limited liability company with registration number 58332, its network of member firms, and their related entities. Consulco Limited and each of its member firms are legally separate and independent entities. Information relating to the Consulco Group is available at www.consulco.com . As stated here above, you should consult your advisors before taking any action that may affect your financial situation. No entity in the Consulco Group shall be responsible for any loss whatsoever sustained by any person who relies solely on this material, such reliance being expressly discouraged.