Case Study
Assisting a PE firm find property investment targets in the central London residential market
Market Assessment | Target Identification | Property Acquisition
Business need
- A UK-based private equity real estate (PERE) firm with investment interests in direct property and property-related capital market securities wanted to purchase residential flats and a shopping centre.
- It sought to subsequently redevelop the residential flats and the shopping centre into new high-quality commercial premises with residential flats.
- It engaged RocSearch to develop an understanding of the London residential market over the past three decades, focusing on high-end residential comparables in the central London area.
To understand the central London residential market, buy properties and renovate them to offer new spaces.
The client outlined two key reasons for selecting RocSearch:
- Our proven investment research and advisory capabilities.
- Our wide exposure to the UK’s real estate market.
Approach and Methodology
- Our investment research and advisory team analysed the market after identifying the key postcodes in the central London area and the central London boroughs. To understand the market, we conducted secondary research by extracting the required datasets from the LonRes database and Land Registry.
We examined the London residential market after identifying key postcodes in central London and inner-city boroughs, extracting necessary data from the LonRes database, and analysing historical trends over different cycles.
- We analysed the historical trends in the central London residential landscape through different cycles.
- Furthermore, we created charts covering: (a) historical capital values per square foot (PSF), (b) total volume and value of properties sold, categorised as per the size bandings, capital values PSF, etc., (c) total volume as per the central London boroughs, and (d) pie-chart for each borough depicting total sales for the latest year.
Business Outcomes
- The study provided a detailed analysis of the high-end residential real estate sector and a pipeline of residential target opportunities.
- It enabled the client to understand the various aspects of the market and narrow down the targets.
- The client shortlisted 34,000 comparables, including property volume sold and capital values per square foot.
The client successfully shortlisted 34,000 comparables, including property volume sold and capital values per square foot.
