Residential Land Press and Media Section

Property Week – Ritchie: ‘It’s a good time to sell non-core assets’

Residential Land is one of the top stories in this weeks Property Week, with the article about the sale of three west London properties.

property week - Residential Land

Residential Land has sold three west London properties for a combined £161m as it looks to raise capital for new value-add acquisitions.

The biggest deal is the £58m sale of Roland House (pictured), an art deco apartment complex on Old Brompton Road, South Kensington, to Gulshan Bhatia, the owner of hotel operator and developer Muirgold, whose portfolio also includes the Hilton Paddington and Hilton Waldorf hotels.

Residential Land has also sold Kew Bridge Court in Chiswick to Grainger for £57.5m, which represents a 4.35% yield; and the Thurloe Commercial retail scheme on Fulham Road to the Pramerica pension fund for £45.8m – a 3.49% yield.
The firm’s founder and chief executive Bruce Ritchie said the sales were part of a strategy to “release capital and invest in acquisitions where we see the opportunity to generate growth through enhancement and redevelopment”.

He added that amid current market uncertainty, it was the right time to offload mature assets. “As conversations continue around Brexit and new tax laws are set to come to fruition, now is a good time to sell stabilised non-core assets and reinvest in our value-add portfolio,” he said.

The 30,328 sq ft Roland House comprises 94 serviced apartments and two penthouse suites, which are currently rentable at prices of up to £730 per week. The sale, on which Residential Land was advised by JLL, represents a yield of 4.48%.

Thurloe Commercial is a 26,000 sq ft development that is home to eight retailers including: Ralph Lauren, the flagship London store of Italian furniture-maker Poltrona Frau and British furniture and homeware retailer OKA.

Kew Bridge Court is a 2.2-acre gated development consisting of 94 one-, two- and three-bedroom flats and four newly developed eco houses, and has planning consent for a further five penthouse units.

Residential Land - Property Week

Click to read article in Property Week

Residential Land comment in Property Weeks article ‘Will resi run out of rocket fuel?’

Bruce Ritchie, CEO and founder of Residential Land comments in Property Week on the topic of ‘Will resi run out of rocket fuel?’

property week - Residential Land

“This will be a pivotal year as higher property taxes begin to impact the market. When George Osborne decided to hike stamp duty land tax on residential property in December 2014, he would not have guessed the national stamp duty take would fall. But that is what has happened, and a subsequent rise to up to 15% on buy-to-let investments will only cool the market further.

“The upshot, without a cut in stamp duty, will be a reduction in: the number of new homes starting in London; the amount of a° ordable housing built inside the M25; and the number of family-sized units in developments.

We’ll also see an above-average increase in the value of new homes under £1.5m, as people flood into property priced below the top stamp duty tax band. At the same time, Osborne is an accomplished politician and I expect that later in 2016 he will realise he has overcooked tax on residential and increase stamp duty on commercial property to level the playing field and help new-build.

“Finally, we’ll see an increase in the global appetite for property as an investor safe haven. And it will be ‘back to the 1970s’ – with many key London figures exiting the UK to become residents in other jurisdictions while jetting in and out to run their businesses.”

Will resi run out of rocket fuel? - property week

Property Week feature 39 Hill Street, Mayfair

Residential Land are delighted to be featured in Property Week regarding the acquisition of 39 Hill Street in Mayfair. You can read the full article below:

property week - Residential Land

“Prime London Ventures Partnership, a joint venture between Canadian investor Ivanhoe Cambridge and Residential Land, acquired 39 Hill Street in Mayfair for £100m. The rare residential block was sold by HSP and five individual vendors in a deal that Residential Land founder Bruce Ritchie had been pursuing for 10 years. According to the company, the idea is to refurbish the block and turn it into the “Claridges of Mayfair residential”.

39 Hill Street Property Week

Residential Land acquire 39 Hill Street in Mayfair

logo_egi

Residential Land is proud to announce that it has completed on a new building in the heart of Mayfair, 39 Hill Street. Bruce Ritchie, CEO and Founder of Residential Land comments in the Estates Gazette below:

By Alex Peace | Residential | 11-12-2015 | 7:00

Residential Land091

Ritchie: “The rarity of the building and the opportunity justifies the expense.”

Residential Land has paid £100m for a prime residential rental block in the heart of ­Mayfair, W1.

The company’s Prime London Ventures Partnership, a subsidiary of its joint venture with Ivanhoè Cambridge, has bought 39 Hill Street, an unbroken freehold building comprising 65 one- and two-bedroom flats.

Residential Land estimates the block has the potential to provide a rent roll of as much as £6m after it has been refurbished.

Chief executive Bruce Ritchie said he had been eyeing a deal to buy the site for 10 years and he intends to transform the block into “the  Claridge’s of residential in Mayfair”.

Most of the flats were sold by HSP, with five other flats in the development owned by individual vendors.

Smaller rental units, particularly in an unbroken block, are rare in prime central London.

Ritchie said: “The departure for us is that we have paid £3,000 per sq ft for it and that is more than our self-imposed limit, but the rarity of the building and the opportunity justifies the expense.”

Built in 1935, the 40,000 sq ft building originally comprised 94 studio flats. There is also a restaurant on the ground floor with a 4,000 sq ft garden.

39 Hill street 330699 Ext3_RGB_800px

39 Hill street 330699 Ext2_RGB_800px

Residential Land expects to spend the next two to three years refurbishing the building.

Residential Land and Ivanhoè have completed more
than £400m in acquisitions since announcing the creation of a new £650m fund in February.

The partnership now has a portfolio of more than 900 central London homes with a combined value of £1.3bn.

 

 

 

 

Find all the available apartments in  39 Hill Street, Mayfair, London here >> 

Stamp duty rises are having unforeseen effects on the lower end of the residential market

Bruce Ritchie, CEO and Founder of Residential Land, talks to Property Week and CITY A.M about the impact of a Stamp Duty on the Residential market.

property week - Residential Land

2910.1405341168

 

 

 

 

In recent years we have had the perfect storm of tax changes in residential…

From the introduction of annual tax on enveloped dwellings to offshore capital gains tax, from clampdowns on corporate vehicles buying property to the removal of buy-to-let relief and even the prospect of base erosion and profit sharing imposed by the Organisation for Economic Co-operation and Development.

But there is one change that threatens to tip the market over the edge: the sharp rises in stamp duty that were introduced in December 2014 – and in particular the 12% rate introduced for properties of more than £1.5m.
The principle underpinning UK home ownership is that you do not pay tax on the gains on your principal primary residence over the long term. However, with the new stamp duty levels this has changed. Imagine you are a homeowner who 10 years ago bought an apartment for £1m; you have spent more than £500,000 on it; and it is now worth £2.5m.

You have technically made a £1m gain over the 10 years. However, now anyone looking to buy your home is likely to discount their offer by up to £300,000 to take into account the new stamp duty rate.

This is the equivalent of 30% tax on the profit you have made, not taking into account the 12% you will pay to acquire your next £2.5m home. Big purchase tax numbers that are not obviously wrapped up in the value of real estate scare purchasers away.

Since the stamp duty changes, the London market has cooled considerably between £5m and £10m, less between £2.5m and £5m, and is continuing to hold its own but with reduced volume in the £1.5m to £2.5m bracket. Some might say this was the chancellor’s aim, to slow the market and bring in revenues. However, there are consequences.

Unintended consequences

While moving to a ‘slab’ system of stamp duty was designed to harvest more tax from relatively wealthy property owners, the unanticipated consequence will also be to limit supply of affordable homes for the less well-off.

Bruce Ritchie

This is because the profit generated on flats of £1.5m-plus on a large development funds the affordable housing that is also built as a result of the development. Put simply, higher stamp duty at the top end is choking off the supply of affordable housing, with the result being that fewer homes overall are built.

Another unintended consequence of the stamp duty changes is that developers are stepping up the supply of one-bedroom units that fall beneath the £1.5m limit, distorting the mix of homes supplied.

Substantial reductions in the volume of sales inevitably lead to reductions in price because not everyone has the luxury of time when they need to sell, and these price reductions will threaten loan-to-value covenants and ultimately create banking credit risk.

At the same time, it seems odd that none of the above measures have been used to tax commercial real estate. At present an offshore individual can invest, via a corporate vehicle, in commercial real estate, sell either the asset from that vehicle or the vehicle itself and pay no tax in the UK on any profits made (not the same for residential). If we are to build more homes, then a level playing field is the minimum standard of parity one would expect.

As the figures for the end of 2015 come through, the 30% fall-off in sales volumes experienced by properties in excess of £1.5m will have far-reaching consequences.

A major consequence of the high stamp duty charges of more than £1.5m is that the average prices for properties priced at less than £1.5m are moving up more rapidly.

This, too, is not in the best interests of the country, with double-digit growth in the London midmarket being spurred by the unintended difference between the two upper bands. A reduction in the gap in stamp duty with the level above £1.5m could calm this effect.

It is clear that the chancellor has succeeded in cooling the market, but the figure of 12% was an overshoot and should be reassessed to 9% between £1.5m and £6m. Unless the chancellor wants to see his overall stamp duty take continue to fall, he will adopt this measure in his 25 November Autumn Statement.

 

Residential Land features in ‘London’s most luxurious rental homes’

Residential Land is featured in the Evening Standard’s, Homes & Property article, ‘London’s most luxurious rental homes’. Out of the 23 properties, you can find Residential Land’s properties in the first 3 slides.

London's most luxurious rental homes

London’s most luxurious rental homes

London’s most luxurious rental homes >>

The properties being showcased are:

Merchant Square
Located in the historic Paddington Canal Basin, 4B Merchant Square is a contemporary apartment building with 60 prestigious 1, 2, 3 and 4 bedroom apartments set over 15 floors now available to rent. 

Kew Bridge Court Eco Houses
Each home has been designed with the environment in mind and offers the latest in technology to allow a cost efficient solution to running the home. The houses include solar panels, extensive insolation, green roof gardens, ventilation systems, underfloor heating, hot taps in the kitchens and security systems.

Residential Land complete on Hamlet Gardens

Residential Land is pleased to announce the purchase of Hamlet Gardens in Hammersmith, west London. This red brick Victorian Mansion block consists of 122 luxury flats and is set at 95,000 sq ft.

Hamlet Gardens flats to rent Residential Land

For further information, please read the below article that was covered in Property Week:

property week - Residential Land

 

 

 

 

Residential Land primed to buy luxury flats in London
By Hannah Brenton

Hamlet Gardens, Hammersmith, London
The residential investor has agreed to buy the 95,000 sq ft Hamlet Gardens development from Swedish investor Akelius for around £95m.

The purchase amount reflects a price of around £1,000/sq ft across the scheme near Ravenscourt Park.

The private rented sector specialist has been on an acquisition spree since securing further backing from Canadian pension fund giant Ivanhoé Cambridge for a fifth Residential Land fund in February.

The new £650m fund is focused on a broader area of prime central London, and its upper price point for investment has increased from £1,500/sq ft to £1,650/sq ft.

In June, it snapped up Chase New Homes’ residential scheme at Palace Wharf in Fulham at £1,250/sq ft – in a deal worth approximately £37m – as well as a luxury 60-flat scheme at 4b Merchant Square, Paddington, for £60m from Native Land and Malaysian investor Amcorp.

Akelius has renovated the majority of the properties at Hamlet Gardens since purchasing them from an arm of the Royal Bank of Scotland for more than £40m in 2013.

Three final phases are still being renovated but these have been forward-purchased by Residential Land and are included in the purchase price.

Similar flats in the area have recently sold for as much as £800,000.

“We believe that there will be growth in the area around Ravenscourt Park and are pleased to have invested another £100m in the prime central London market,” said Ritchie.

 

http://www.propertyweek.com/news/residential-land-primed-to-buy-luxury-flats-in-london/5076821.article 

Fighting talk ahead as property heavyweights prepare to square up

Residential Land have been mentioned in the Evening Standard ahead of the Props Breakfast in October hosted at the Dorchester, London. This year Bruce Ritchie CEO of Residential Land & Michael Slade CEO of Helical Bar will partake in a live Commercial vs Residential debate hosted by Emma Crosby.

Michael Slade has for a number of years run one of the most successful public property companies whilst Bruce Ritchie runs one of prime Central London’s largest residential landlords who are making a significant impact in the sector. With London and residential being hot topics in real estate at the moment

Props breakfast 2015

For the article, please read below:

EveningStandard

Fighting talk ahead as property heavyweights prepare to square up

The first rule of Fight Club is, you do not tweet about Fight Club — that’s how it goes, right?

Well obviously someone’s been breaking the rules, as Spy spots #FightClub creating waves on Twitter. Was it Ed Norton and Brad Pitt bemoaning the demise of the Fail Whale?

Alas not. It was property types getting excited about a Props charity debate between Mike Slade of Helical Bar and Bruce Ritchie of Residential Land, slated for the Dorchester in October. The pair will thrash it out in a commercial real estate v residential debate, a third speaker — Robert Paulson — is as yet unconfirmed.

Bruce Ritchie talks to Estates Gazette on the hot topic of price per sq ft in London

Bruce Ritchie, CEO of Residential Land, talks to Alex Peace at Estates Gazette on the findings from their London Residential Research team, showing that price per sq ft in London has been driven through the £1000 per sq ft mark, not only in Prime Central London areas but the fringe areas surrounding it as well.

Bruce Ritchie explains: “Prime Central London has not resolved its supply problems and is not creating enough new product. Too much demand from both domestic and international, for what it is we have, both for sale and being built and that is pushing prices in the upwards direction.”

To listen to more, click the play button on the podcast below:

Bruce Ritchie talks to Estates Gazette

Click here to read the full article >>

Nobody wants to be seen as token

Emma Whitby-Smith, Head of Investment at Residential Land talks to Estate Gazette about diversity within the property industry.

Emma Whitby-Smith, Head of Investment

Emma Whitby-Smith, Head of Investment

When I first started in the property industry 30 years ago, diversity on any scale didn’t really exist, or if it did, it wasn’t high on the list of management priorities.

Any industry that is reliant on building relationships needs people who are representative and have a broad mix of gender, sexual orientation, race, religion, personalities and opinions. Thankfully, on the whole, the working environment has changed in a positive way in the past ten years. While there is always scope for improvement there is certainly broader diversity at senior levels in the property industry.

But diversity is not a buzzword. There is a difference between “complying” and truly understanding. Nobody wants to be viewed as a token individual within a company.

Employers should understand that employee welfare is a priority, and should review company policy regularly and engage with employees at all levels to improve working relationships. An individual who feels accepted, included and understood will in turn be happier and feel more valued. Understanding business is understanding people.

The London property industry is embracing diversity and companies are taking huge steps to introduce and improve diversity programmes. Freehold’s work has been a game-changer. The LGBT property networking group holds monthly events hosted by industry giants such as British Land, Savills, Cluttons, JLL, Shaftesbury and RICS, to name but a few. These respected companies understand that diversity is not about fixing a problem – it is about ensuring business sustainability and improved performance.

I can of course, only comment on the London property scene; other areas in the UK are sadly not as progressive. It is even worse in other countries.

While my sexuality doesn’t define me, it is absolutely an integral part of who I am and it is an enormous relief I can be honest about the fact I have a long-term female partner with my colleagues and associates. Twenty-five years ago, I would have thought twice about being so open for fear of prejudiced assumptions or worse.

People have been discriminated against, and sadly continue to be so, for no other reason than for being different. I have the support of my chief executive, who values my contribution to the company and respects me for who I am. He recognises that a one-size-fits all approach to managing people does not achieve fairness and equality for everyone.

People have different needs, values and beliefs. Good management demands fairness and equality but also flexibility and inclusiveness.

Read the article on the Estates Gazette website here.