London, August 1st 2019 Addington Capital, the property investment and asset management specialist has recruited David Dalrymple as a salaried partner focussing on asset management. Dalrymple joins from Columbia Threadneedle Property Investments where he was a senior asset manager specialising in the UK Real Estate Market.

David will be primarily responsible for looking after assets in the office sector.

At Columbia Threadneedle, David gained high levels of experience in all sectors of the market, namely offices, retail and industrial. He was Lead Asset Manager on the highly successful “UK Property Select Fund II”, a close ended private equity vehicle launched in 2013. Within this fund, he worked on transforming schemes such as Coda Studios (Fulham), Vantage London (Brentford), The Hat Factory (Camden) and Caldecotte Lake Business Park (Milton Keynes). He was also at the forefront of the flexible leasing evolution at CTI, developing a short form lease for the business.

Addington Capital was set up in 2010 by Martin Roberts and Matthew Allen as an independent asset management business and has an established platform in the office, retail and residential sectors. It acts as operating partner in a number of joint ventures to create value through active asset management.

David joins a team of 17 now at Addington. The business recruited Mike McGovern as new head of Development in March from Eastern and Oriental.

Commenting, Martin Roberts, Principal of Addington Capital said, “We are delighted to have attracted a professional of David’s calibre to our team. His knowledge of private equity vehicles as well as his market experience will be invaluable to us. Addington continues to find opportunities to enhance property values across our main sectors of office, retail and residential and we believe that opportunities will only increase in this period of changing markets. “

Posted in News on 01 Aug, 2019

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The value destruction going on in our towns and city centres presents both the greatest challenge and the biggest opportunity in my 30 years in the property industry. Our industry is familiar with economic cycles but not used to big structural changes in the occupational markets.

The way the commercial industry has organised itself as sector specialists operating in silos makes it harder to solve today’s challenges. This structure is along skill lines and profit lines, with interaction between skills and profit centres often relatively minimal.

Housebuilders, meanwhile, are a different animal altogether; a career in housebuilding is as different to working in commercial markets as lawyers are to accountants.

We are facing a challenge that will keep us all busy for a generation: fixing our towns and city centres. But to invest in and advise on town centre regeneration, investors, funders and advisers need to be sector agnostic. The approach and methodology used to analyse the potential of a site or empty building needs to be without a bias towards one use or another and a breadth of know-how is needed to assess the costs and risks of each.

The knowledge gap is never wider than between the commercial and residential approach. The latter is fundamentally different because it is consumer facing, while the commercial industry is business facing. Housebuilders sell to the public, with all the nuances that come with that market.

At Addington, we have acquired/leased/refurbished/built nearly 2,500 homes in the past seven years in 15 UK cities and towns, and consumers in each submarket behave differently and demand different things.

The commercial side of property is fast tooling up to embrace BTR and PRS – but that is a tiny, albeit growing, part of the residential universe. Is it a PDR opportunity or a new-build? Is it C3, C4, student housing or retirement/care or social housing? Is it for rent, to buy or in fact a hotel? It is hard to find the breadth of advice to properly answer these questions while the industry is working and training its professionals in sector silos.

Most stakeholders in our towns and cities – the fund managers and councils – need expert advice to mitigate value destruction in retail centres and ensure a transition to the best sustainable uses. Most of the professionals on the principal side come from a commercial property background and find it difficult to see the wider picture.

We will also need capital providers with the skills but also a rare combination of appetite for risk and the necessary patience these projects are likely to demand. These opportunities are going to need capital more driven by equity multiples than IRRs. Private equity funds provide the bulk of risk capital in our markets but their impatience could be a barrier to entry.

Of course, property advisers and some forward-thinking investors are trying to adjust to today’s market by creating mixed-use teams on to which they co-opt experts from the different silos. While this an imperfect solution, at least it’s a step in the right direction.

But there is still some way to go. The dislocation of the retail sector and value destruction we are only just starting to witness will offer immense opportunities for businesses that are able to adapt. The solutions will inevitably be complex to evaluate and difficult to fund and execute, and the capital will need partners and advisers that are agnostic to use and fit for purpose.

Matthew Allen is principal and co-founder of Addington Capital

Please note this article appeared in Property Week on July 26th 2019

Posted in News on 29 Jul, 2019

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Fred Verity Joins from JLL

London, May 24th 2019, Addington Capital, the investment and asset management specialist has recruited Fred Verity as an asset manager to join its residential asset management team.

Fred joins Addington from JLL where he has worked in the firm’s residential advisory business, in its Affordable Housing Team since 2016. This has included advising on viability studies and valuations for land owners, developers and investors on how to optimise and generate value through their relationship within the affordable housing sector. Prior to that he worked in JLL’s Residential capital markets team.

Fred joins a growing residential team at Addington Capital. In addition to offering development and asset management in the sector, the Addington founders have set up a sister company, ADDLiving , an independent management and lettings platform to service the growing PRS/BTR sector in the UK. Erdal Kacar joined as head of operations last summer and ADDLiving now boasts a team of 12.

Addington Capital, with its partners, has acquired around 2,200 houses and apartments across the UK since 2012. In October last year it acquired, with Europa Capital, a £55 million portfolio of 202 residential properties in London acquired from clients of Allsops). And in February it gained planning approval for a residential development in Leeds City Centre for 100 apartments. (See notes below for other residential experience)

Commenting, Martin Roberts, Principal at Addington Capital said, “Addington has continued to find opportunities in the residential market, which we have capitalised on with our investor partners, whether in buying schemes, managing existing assets or creating new opportunities for residential development on mixed-use sites. Fred is a strong addition to the team and we warmly welcome him to the business.”

Posted in News on 24 May, 2019

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Europa Capital and joint venture partner Addington Capital have sold the final residential unit at RAF Lakenheath in Suffolk, UK, on behalf of Europa Fund IV, following a major conversion programme. The assets consist of 473 terraced units and detached houses and were previously used as the married living quarters for the US Air Force, hosted at RAF Lakenheath and home to the 48th Fighter Wing, accommodating over 5,000 US military personnel and 2,000 UK employees.

The properties, which are located alongside the base, were acquired by Europa Capital and Addington in 2014 from Ireland’s National Asset Management Agency. Since then, the properties have been carefully refurbished and modernised to create an attractive selection of two, three and four-bedroom homes for purchase. The works were predominantly focused on updating interiors, bathrooms and kitchens, as well installing government-backed Air Source Heat Pumps, an innovative and renewable energy technology that heats the home from air outside.

Many of the homes were targeted at first-time buyer and started at £175,000 for a two-bedroom unit. They provide commutable access to the cities of Cambridge and Norwich. The initial investment included a small retail parade of seven 1,000 sq. ft. units and land parcels providing the potential for additional new homes, all of which was sold down through the ownership.

Europa Capital was an early institutional mover into residential investment and has invested in or developed over 7,000 bed spaces in PRS and student accommodation in key UK and Continental European locations since 2012.

Hugo Black, Partner at Europa Capital commented, “This unique investment provided the opportunity of bringing nearly 500 homes for purchase to the local area, whilst delivering attractive returns to investors through a wholesale to retail strategy. Having gained valuable experience in the residential sector through this and a host of other projects, we are now looking ahead to future opportunities, both across the UK and mainland Europe.”

Martin Roberts, Principal at Addington Capital added, “Addington continues to find opportunities to enhance property values across our main sectors, of which residential is high on the list. We have a proven track record of both spotting opportunities and intensively asset managing such portfolios to create value. We are delighted to have worked with Europa over the past five years to bring about this success at RAF Lakenheath for both new home owners and for investors in the project.”

Posted in News on 03 May, 2019

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Deal strengthens Strawberry Star Group’s volume housing vision of delivering 4,000 homes by 2025

London, 4th April 2019: EPISO, an opportunity fund advised by Tristan Capital Partners, in partnership with Addington Capital, have sold a mixed-use 4.5-acre site with consent for residential 447 units to Strawberry Star Homes for a price in excess of £15 million. The site is alongside the joint venture partners’ Harvey Shopping Centre in Harlow.

Addington secured planning permission for the site, which was previously a shopping mall, to create a mixed-use regeneration scheme. The plans include four new standalone blocks, which provide 447 residential units and around 40,000 sq. ft. of retail space, together with below podium car parking. Above the podium there are planned landscaped private amenity areas.

London based property company Strawberry Star Group’s volume house building division Strawberry Star Homes will build out the site which is expected to have a GDV of £244m.

Jeremy Bullock, Director at Tristan Capital Partners, said: “We saw a real potential to transform this part of the town which had long needed investment by creating nearly 450 new residential homes in an attractive setting. Addington and Tristan have been early movers in the repurposing of underperforming shopping centre space and with the shortage of quality housing in the area, we believe this will provide benefits to all.”

Martin Roberts, Principal of Addington Capital, said: “We were offered a good price for the site and wish Strawberry Star well in progressing the redevelopment. We will continue to intensively asset manage the rest of the shopping centre in the meantime.”

Addington and EPISO bought the Harvey Shopping Centre as part of a broader portfolio in 2011 and have been refurbishing and improving it since then. The Centre has benefitted with the opening of the Terrace in 2016 anchored by the 25,000 sq. ft. Cineworld and a number of new leading restaurant brands.

Santhosh Gowda, Chairman, Strawberry Star Group, said: “The Harlow site is an important investment for Strawberry Star, as it is the next step to realising our vision of delivering volume housing vision for Londoners, especially first-time buyers. This site is part of our long-term strategy to deliver 4,000 new homes by 2025. Massive regeneration in Harlow is driving local demand for quality housing. We intend to provide homes at prices which are achievable to home buyers, who have been priced out of London.”

“The Harlow site is our second mixed-use development in the London commuter belt. Work on our first scheme LU2ON, will commence in May 2019, creating 785+ apartments in Luton. We will continue to work with local councils to contribute to their regeneration plans and address the housing shortage issue in the UK.” Santhosh added.

The site is approximately 10-minutes’ walk from Harlow Town Station, which operates trains to London Liverpool Street station with an average journey time of 30 minutes. Harlow is an attractive option for home-movers from London and other expensive areas looking for family-friendly homes.

Strawberry Star Homes (SSH) builds quality homes in London with a focus on zones 3-9 and popular commuter belts where the demand for homes is rapidly increasing. It focuses on volume housing and lifestyle-driven communities in locations that benefit from new and existing fast transport links to Central London and business hubs. SSH will deliver 4000+ quality new homes (apartments) in the London commuter belt by 2025 to address the growing demand from first time buyers, young families, home-movers, working professionals, buy-to-let investors and international buyers.

Posted in News on 04 Apr, 2019

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