Corporate overview
Long Harbour is a specialist real estate investment, development, and management firm. Uniting market leading expertise across a range of assets classes, Long Harbour generates attractive returns for investors whilst seeking to create buildings of lasting value through thoughtful design and exemplary stewardship.
Long Harbour has a proven track record of AUM growth across its three investment programmes; Secured Income, Living and Regeneration.
Long Harbour’s approach to asset management is to make a positive impact in the communities in which it operates, whilst delivering long-term value to its investors through platform-based, thematic strategies.
Investment principles & strategy
Long Harbour’s investment approach has three key pillars:
- Funds are allocated following a vigorous examination of key investment fundamentals to measure opportunities in real estate markets against a wide range of city criteria, including factors such as population, economy, infrastructure and employment. Adopting a strong research-led approach enables us to be strategic and create accurate return/risk profiles on a project-by-project basis.
- The management of Long Harbour’s assets is brought in-house to deliver better customer service and maximise the value and performance of the buildings and investments. For example, Way of Life is Long Harbour’s award-winning consumer-facing BTR brand and manages all assets, as well as providing third-party management consultancy to external operators. ESG strategy is delivered in partnership with Longevity, the leading global sustainability consultancy that Long Harbour seed funded in 2015 and maintain a 50% stake in.
- Identifying favourable social and economic characteristics helps us to be confident that funding is underwritten based on solid market data. This is supported by stringent risk control measures in the execution of asset development and management, working within the limits set by each investor and at the appropriate level for each product.
Sector forecasts
RESIDENTIAL:
Whilst high inflation and rising interest rates have impacted negatively on residential real estate, it has weathered the downturn better than other sectors and there is substantial dry powder to deploy at the right time.
For now, there has been more of a positive impact on operational assets, particularly those whose income is linked to inflation. This demonstrates the resilience of residential assets such as build to rent (BTR), later living, co-living and student accommodation, despite rising labour and utility costs. We are seeing pricing adjustments to reflect higher interest rates and labour costs, however some of this is being mitigated by rising rents.
The demand for co-living spaces has been particularly boosted by the return to the office period, post-pandemic, with tenants attracted by a zero-commute lifestyle that the offer typically provides. For many, particularly young people who wish to live in cities, close to their jobs and amenities, co-living provides an affordable living solution. Overall, this is a nascent sector that is poised for huge growth, with Savills predicting that the potential size of the ‘core target market’ for co-living across the UK to be circa 725,000 units.
Similarly, the outlook for purpose-built student accommodation (PBSA) remains a positive one. Already renowned as a sector that generally offers long-term capital appreciation and low risk, stable returns. PBSA is an increasingly popular option for students, attracted to the high-quality, amenity-rich accommodation that is typically delivered. Student numbers are at an all-time high, driving record occupancy levels and boosting investment appeal yet further.
Single-family housing (SFH) is also one of the bright spots. Investment topped £600m in the first quarter of 2023 – more than the total for the whole of 2022 and more than multifamily for the first time on record, according to JLL. More is expected to follow as rising rents boost investor demand and the slowing housing market makes housebuilders more willing to sell to SFH operators.
For some time now, BTR has been one of the fastest-growing asset classes. Investment in the sector can make a substantive contribution towards the government’s ambitious housebuilding targets, while supporting regeneration and levelling up across the UK. The sector only represents a modest 1.5% of the total private rented sector, according to the BPF, which demonstrates significant growth potential.
Developers’ focus is shifting from the build phase to how to successfully bring assets to market and, so far, consumer awareness and buy-in to the concept havebeen extremely encouraging.
Both SFH and BTR have an important role to play in the sector-wide ESG push, particularly in supporting key worker housing and creating energy efficient homes, utilising modern methods of construction.
OTHER:
Cities are at the forefront of our battle against climate change, with 70% of global greenhouse gas emissions generated by cities. Those involved in urban development are galvanising behind the concept of the 15-minute city, where everyone can meet most, if not all, of their needs within a short walk or bike ride from their home. These walkable, vibrant urban neighbourhoods can significantly reduce emissions and bring co-benefits for health and wellbeing.
The move is supported by a growing body of research confirming the health and lifestyle benefits that can be achieved from shorter or fewer commutes, more time for family and friends and greener, more walkable neighbourhoods.
To support this approach, investors in this space will need to consider a deferred approach to financial returns, measuring the success of developments through social and environmental gains and a focus on longer-term value.
This approach fits with the sector’s increasing emphasis on ESG, which calls on the industry to incorporate greater resilience and sustainability, and with the needs of community in mind. As such, we anticipate that legacy and placemaking will continue to feature more prominently on the agenda with even more flagship examples of 15-minute cities popping up across city, suburban and rural locations.
Strategic corporate development
Long Harbour continues to consolidate its position as a leading, full-cycle real estate investment, development and property management firm:
- Working together with our international investors PSP Investments and Cadillac Fairview, we have accelerated the deployment of our £1.5bn BTR platform, increasing our pipeline to 5,200 homes, almost double the previous year’s In total, we have delivered circa 3,500 BTR homes since 2013.
- Way of Life is pioneering a new way to meet the needs of modern living, from the design of high-quality and flexible living spaces to support hybrid working, through to tech-enabled property management and best-in-class 24-hour on-site services. Almost all processes are now automated, creating an industry-leading digital platform which allows customers to book viewings, take virtual tours and reserve apartments entirely online.
- Long Harbour has recently launched a single-family housing platform, which aims to grow into a £1.5bn venture. The platform will leverage Long Harbour’s excellent relationships with housebuilders and Way of Life’s resident lifestyle and customer service.
Performance Verification
Over the past year, we have demonstrated resilience, and continued to grow the business through existing strategies whilst assessing further growth opportunities.
With over 2,000 operational residential units and a HomeViews score of 4.6/5, Way of Life is redefining customer experience in the build to rent sector.
We have reinforced our purpose as a people-focused business, with strong ESG credentials.
COMPLIANCE STATEMENT
Long Harbour Ltd was authorised by the Financial Conduct Authority in 2013 to act as a full-scope alternative investment fund manager. We manage several real estate funds where the investment strategy is focused on providing investors with opportunities that offer attractive, risk adjusted, long-term, and highly diversified income returns.
In line with the current UK and global regulatory requirements, domestic and overseas investors can pass day-to-day portfolio and risk management of their investment to us and seek comfort that funds are held in compliant structures subject to robust ongoing monitoring.
All Alternative Investment Funds managed by Long Harbour have an independent depository appointed to administer, monitor cash flow, and ensure the safe keeping of the underlying assets.
