Corporate overview
We are a leading commercial property investment manager, focused on the UK market and acting on behalf of institutional clients world-wide to advise on investment in the responsible and active management of commercial property assets.
We are a trusted adviser and have delivered 20 years of consistent performance for our clients.
Responsible investment is in our DNA. It’s embedded in every aspect of how we operate as a business and how we manage our clients’ capital.
Orchard Street is leading the way towards a low-carbon, prosperous future through our work as an environmental and social Impact manager. By combining pioneering sustainability experience with proven asset management expertise, we create sustainable, resilient assets with better financial outcomes.
Orchard Street – the perfect balance of sustainability and performance.
Responsible real estate investment manager
- Taskforce on Climate-Related Disclosures supporter
- Net Zero Asset Managers’ Initiative signatory
- Better Buildings Partnership Climate Commitment signatory Ț PRI signatory
- First UK refurbished building to receive WELL Gold Shell & Core certification
- First carbon neutral in operation industrial site in west London
Founded in 2004
- Exclusive focus on real estate with €3bn in AUM*
- 20 years of driving consistent outperformance for our stable of world-class investors
- Strong track record executing investment programmes including €3bn invested in 10 years to 2023
- OSIM team financially aligned with our clients’ interests
- Single investment committee delivers consistency across all mandates through cycles
- Demonstrable responsible investment across portfolios, including initiatives such as:
First UK refurbished building to receive WELL Gold and Core certification, and
First carbon-neutral industrial site in operation in west London
* AUM as at September 2024 and represents the aggregate of the net asset values of client assets under management, measured under the individual client’s reporting GAAP (Generally Accepted Accounting Principles), with the addition of undrawn committed capital.
Sector forecasts
INDUSTRIAL: We expect demand for multi-let industrial estates, from both tenants and investors to remain strong, particularly for industrial estates in and around larger conurbations. Occupiers forced out of London by rising rents are expected to continue to drive rental growth elsewhere in the UK particularly in the South East.
OFFICE: Structural change in demand for offices continues to roll through the market, with demand focusing increasingly on a small number of office locations. Central London offices are leading the recovery in office market performance, and whilst there are likely to be pockets of good performance, this is largely expected to be confined to the ‘Big Six’ office locations with a significant proportion of the current stock outside of the largest centres remaining economically unviable in its current use.
RESIDENTIAL: We expect rental growth on residential properties to be on a par with, and potentially outstrip that of the industrial sector as the shortage of good quality housing is likely to persist and rents continue to keep pace with wage growth. Whilst the residential sector is a highly diverse market, we favour well located single family homes and multifamily in the larger urban centres, particularly where the existing stock is of poorer quality.
RETAIL: Activity in the retail sector is traditionally the most closely correlated to the health of consumers. Retailers face rising costs and falling sales volumes and this is likely to impact negatively on their profitability over the coming quarters. That said, the value of retail investments are yet to fully recover from COVID lockdowns and they are currently priced on relatively attractive yields and cap rates which will provide a degree of insulation against rising yields. We continue to favour supply-constrained out-of-town retail warehouse investments over the majority of town-centre locations, although certain larger ‘destination’ town centres are starting to look good value.
OTHER: The diverse range of alternative investments is likely to produce a similarly diverse range of outcomes. We expect long leased assets to see a re-rating of yields in response to sharply higher Gilt rates. There is expected to be downward pressure on discretionary leisure spending which could adversely affect trading for a number of hospitality businesses not least the struggling cinema sector but also big ticket items like car retailers. Our top pick is the purpose-built student accommodation sector which in the strongest cities has strong domestic and international demographic tailwinds, with limited supply and contra-cyclical tendencies.
Investment principles & strategy
Orchard Street believes that investment in relevant locations with innovative asset management plans is key to creating sustainable income (critical when approximately 75% of total return has come from income over the longer term).
The firm’s core beliefs as a real estate manager are that:
- Responsible investing must be embedded within the acquisitions, development and refurbishment procedures to enhance the long-term value of clients’ real estate portfolios;
- Pro-active asset management creates outperformance;
- Multi-let assets with multiple business plans, in the best locations, generate stronger returns with a lower risk profile.
- Disciplined investment decisions create a reputation for Orchard Street as a reliable counterparty which adds value; and
- Smaller highly focused teams with extensive experience can outperform larger firms.
Performance verification
Orchard Street has consistently outperformed over three, five and 10 year periods against the MSCI UK Quarterly Property index. The performance shown below is a composite track record of Orchard Street client mandates that are benchmarked against MSCI.
COMPLIANCE STATEMENT
This information is provided for use by qualified institutional investors and their advisors only. Further information is available on request or on our website.
Whilst Orchard Street Investment Management LLP is not regulated, its wholly owned subsidiary, Orchard Street Investment Advisers Ltd. is authorised and regulated by the Financial Conduct Authority of the UK (FRN 461061).
