Investment opportunities in UK property
Manish Chande is a Senior Partner at Clearbell Capital, with over 30 years of real estate experience. He co-founded Clearbell in 2013 and Mountgrange Investment Management in 2007 and was previously a board director at Land Securities and CEO of Trillium, a pioneering sale and lease-back property business. Clearbell has two funds invested in property across the UK.
Clearbell has a small team of around 25, plus 5 partners including Manish.
Where does your investor interest come from?
Our investors come from across the world and include pension funds, sovereign wealth funds, wealth managers, family offices and high net worth individuals.
What is your outlook on property investment opportunities in the UK?
In spite of the generally accepted view that the London property market is overpriced, we believe there remain a number of investment opportunities outside of London.
Where are we in the cycle?
The UK market is taking a pause for breath and sentiment has weakened after a period of sustained recovery that followed the global financial crisis. However, the under supply of real estate in many key leasing markets, particularly in the regions outside London, will remain for the foreseeable future, sustaining a landlords’ market.
What will the impact of rising interest rates be?
Indicators are that interest rates will remain low for the time being. However, the wide positive yield gap, and current rental growth potential, mean the market is able to absorb rising interest rates without a significant expansion in property yields. With interest rate rises delayed, we do not see this as a concern for UK property at this time.
What will the impact of the EU referendum on UK property investment be?
Over the long term we expect the attraction of the UK to persist, whether we vote to remain or leave the EU. Many overseas investors may currently have a more wary approach towards UK property due to the uncertainty that accompanies the EU Referendum but we expect this to be short lived. In the short term the uncertainty creates buying opportunities.
Where do you see value?
As the market softens we may see mispriced opportunities re-emerge in London. In the regions the yield spread between prime and secondary remains three times 2002-2008 levels. This risk premium underpins the opportunity set to generate target risk adjusted returns.
What assets do you look to invest in?
We invest in a range of sectors including office, industrial, distribution warehouses, residential, retail and hotels. Currently 40% of our portfolio is office and 19% industrial.
What is your approach to asset management?
By having an intense approach to asset management we seek to unlock value throughout the life of the investment.