Corporate overview

Long Harbour is a modern real estate investment management firm, and a leader in the operational real estate sector. We combine a forward-thinking approach with proprietary technology, leveraging data driven insights to build successful investment strategies and property management practices.

Long Harbour has a successful track record of generating attractive returns while creating and managing modern buildings of lasting value to communities, providing economic, social and environmental benefit.

Our unique approach means we are trusted by our partners as a best-in-class sector leader at the forefront of the future of real estate.

  • Founded in 2009
  • 220 group staff
  • c.£4bn Assets Under Management

Strategic corporate development

Long Harbour continues to consolidate its position as a leading, living and operational real estate specialist:

  • Leading multifamily investor with over £1bn AUM and more than 3,000 apartments developed and a further 2,000 units in the pipeline.
  • Building on its successful single and multifamily track record, Long Harbour has launched a dedicated Single Family Housing vehicle which aims to grow into a £1.5bn venture.
  • Further developing its Living sector offering, Long Harbour launched Rosethorn in December 2023, its Purpose Built Student Accommodation (“PBSA”) platform, which will invest into student accommodation in key areas across the UK.

Strategy & Investment Principles

Strategy

Long Harbour’s investment strategy focuses on the Living sector and investing in operational real estate.

  • Focusing on the Living sector

With a long standing and successful track record, Long Harbour provides investment opportunities across the Living sector, including Multifamily, Single Family and Purpose Built Student Accommodation. Investors are increasingly expected to allocate capital to the Living sector, to tackle the UK’s undersupply of high-quality housing for rent.

  • Investing in operational real estate

Having built the key functions for development, investment and operations, Long Harbour has built two operating businesses, Way of life and HomeGround, and acquired and successfully restructured two more.

Sector forecasts

RESIDENTIAL: Market Overview

Residential real estate, particularly operational assets where income is linked directly to inflation, have remained resilient during a period of high inflation and rising interest rates. Now, with interest rates expected to remain stable or fall in a less inflationary environment, the UK rental market remains well positioned.

A structural shortage of homes for private rent has supported rental growth and underpinned capital values and, according to Savills, there are still 30% fewer homes to rent across the UK compared to the 2018-2019 average.

Rental growth across the private rental market continues to rise but has started to return to more normal patterns, slowing to 5.8% in May 2024, but more than double the 2012 – 2019 average of 2.1% per annum according to Savills. However, with Labour’s pledge to build 1.5 million homes over the next 5 years, new home delivery will increase 50% on the previous 5 years, likely leading to an uptick in growth over the coming years according to Colliers.

For some time now, BTR has been one of the fastest-growing asset classes. As of Q3 2024, Savills suggests the UK’s BTR stock stands at over 120,000 completed homes, up by a huge 23% nationally compared to Q3 2023. There are a further 50,000 homes under construction as well as 103,000 homes in the planning pipeline, including those in the pre-application stage.

According to Savills, the third quarter of 2024 saw £800 million of investment activity – a marked improvement on the same period last year. While lower than the £1.2 billion invested last quarter, this is the second-highest Q3 of the last four years. Since 2015, Q3 has tended to see slower volumes, with most annual investment falling in Q1 and Q4.

Further investment in the BTR 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 2.3% of the wider private rented sector, according to Colliers, which demonstrates significant growth potential. Demand is also growing for BTR owing to an increase in annual net migration and higher average weekly earnings compared to CPI inflation. 

Developers’ focus is shifting from the build phase to how to successfully bring assets to market and, consumers are proving to be attracted to the Multifamily product, with homes taking just 24 days to let in the UK’s 11 largest cities, compared to 32 days in the period before the pandemic.

The BPF’s Who Lives in Build to Rent? research , the largest survey of build to rent tenants in the UK, found that the average rent for BTR is between 15% and 25% higher than the average in the wider PRS, depending on property type, but the affordability ratio (rent as a proportion of income) is similar, sitting between 29% and 33% of household income for BTR and between 26% and 31% of household income for the wider PRS.

Across multifamily housing (“MFH”), single family housing (“SFH”) and purpose built student accommodation (“PBSA”), structural demand is expected to continue to rise.

Multifamily Housing (MFH):

With current momentum and the weight of capital looking to enter the BTR sector, Knight Frank estimates that both multifamily and single family housing will grow substantially over the medium term, but SFH will take an increasing share of total delivery. Having said that, Knight Frank also found that completed SFH stock only accounts for 11% of the overall operational BTR market. This compares to MFH’s 84% share which, as of July 2024, equates to approximately 90,000 multifamily homes according to Savills data.

Single Family Housing (SFH):

Single family housing (SFH) has also become a key part of the UK residential investment market. SFH made up half of total BTR investment in the past year - the highest proportion of the total it has ever been. This is largely due to the role SFH plays in meeting supply – according to Colliers, 32% of PRS households have children, yet 90% of PRS stock is smaller than the average 3-bedroom house. SFH can help to meet this gap.

Savills data also suggests that a period of slower sales rates to homeowners and Buy to Let investors has presented institutions with an opportunity to enter the market. Bulk deal investment (where the transaction involves multiple sites) rose to £1.2 billion in the year to Q3 2024, half of the total £2.4 billion invested in SFH.

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.

Purpose Built Student Accommodation (PBSA):

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. According to Savills, following the steep rise in student numbers since 2019, we will see 4.7 million graduates between 2023–24 and 2026–27, assuming a 10% dropout rate. This will support demand for high quality purpose built accommodation. PBSA is an increasingly popular option for students, attracted to the high-quality, amenity-rich accommodation that is typically delivered.

The UK continues to see robust investment in the sector despite an ongoing challenging investment backdrop. According to Knight Frank’s data, nearly £840 million was invested in PBSA in Q3 2024 across 15 deals. Investment volumes for Q3 were comfortably above the 10-year average for the quarter, taking total investment across the year to £3.3 billion, notably ahead of the £2 billion which had been spent at the same point last year. The UK also continues to perform well in a global context, accounting for 46% of total global capital flows into PBSA worldwide so far this year, reinforcing the attractiveness of the asset class and investor appetite.

Performance Verification:

Long Harbour returns are calculated according to INREV guidelines, and fund performance is assessed against benchmarks relevant to each investment strategy. Long Harbour also participates in the Global Real Estate Sustainability Benchmark (GRESB) across all applicable funds and is a signatory of the United Nations Principles for Responsible Investment (UNPRI), with annual reporting, supporting performance verification and benchmarking.

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.