Navigating the complexities of property investment, especially in a property market as diverse and intricate as the UK’s, can be a daunting task for any investor.
This is especially true for investors who are based outside of the UK and that’s where hiring an owner’s representative can help simplify and expedite this process.
From mitigating risks to reducing hassle, owner’s representatives can ensure your property investments are not only profitable but also aligned with your broader financial goals.
What is the Role and Value of an Owner’s Representative?
Owner’s representatives can add the most value for clients who have limited property knowledge themselves, or they’re located overseas and so may find it difficult to deal directly with some of the complications that can arise through property investment in the UK.
Simply finding the right property to invest in can be extremely time-consuming and you may have to call up hundreds of agents in the process and field multiple follow up calls from them, but if you have an owner’s representative to do this for you, it takes that burden off your plate.
Having an owner’s representative on board also means they can assemble the rest of your team for you.
Let’s say, for example, you wanted to acquire an office block in Mayfair, you would need a broker to source the property, a surveyor to understand the leases and their cashflow implications, a lawyer who can guide you through the process of acquiring the property, a lending specialist who understands that type of asset and if it’s a development project and you want to add value, you’ll need designers, a quantity surveyor and the list goes on.
This is not only so you can make an informed bid, but it’s also so that the project is executed to a high standard and efficiently once it’s underway.
Rather than you having to find all these people yourself, an owner’s representative can put this team together for you ensuring that you have the best local knowledge necessary to carry out the business plan for the project, large or small.
Risk Mitigation through Expert Guidance
Investing in property, especially in London, is not cheap and so you want to know that every step of the way you’re making informed decisions and this is what an owner’s representative enables.
An overseas investor could see an opportunity that looks excellent, but there might be something they’re missing that someone who is experienced in UK property investment could point out.
You may find a terrific flat in Cadogan Square that appears to be really cheap because it’s only £1,000 per square-foot, but then it turns out the lease only has 30-years left to run.
I’ve advised on schemes previously where the introducers of a property, who wanted to go on to be the developers as well, got their maths completely wrong.
They calculated the construction costs based on the net area, rather than on the gross area, so their construction costs were off by at least 30% and the entire project had to be abandoned.
These issues may not be immediately obvious to most people, but on the whole they are to people who have been working in the property industry in the UK for more than 30 years, like myself.
The Importance of Professional Representation in Transactions
The UK is a very institutional market, meaning that most of the commercial, residential, social and student properties are actually owned by institutional investors whether that’s pension funds, insurance companies or high net-worth individuals.
As such, it’s standard practice that both buyers and sellers engage their own advisors and representatives who are able to negotiate the deals amongst themselves and report back to their principals.
Having an advisor or owner’s representative, especially on the buy side of property investment, is a good indication to sellers that the buyer is serious because you will have paid a small up-front fee, which is then recycled into the transaction fee later on and this demonstrates that the buyer has already put money down and so means business.
It also indicates to the seller, because the owner’s representative will have helped to appoint a legal team and a property advisor, that any bids are informed, based on expert advice and they will not have to be retracted later on because they found something wrong at the last minute, which once again results in the bids being taken more seriously from the sell side.
Selecting the right Owner’s Representative
Experience and an expert knowledge of the UK property market are key when investors come to appointing an owner’s representative.
It’s equally important to find someone who communicates with transparency, which means not just pushing a deal over the line to take a fee, but actually on occasions advising an investor not to go through with a transaction if it doesn’t make sense, which I have had to do for my clients a number of times.
The ideal owner’s representative, especially for high net-worth individuals and institutions, is not just someone who has expert property knowledge, but also someone who understands the wealth management aspect of property within a greater diverse portfolio.
They must have a breadth of experience in property, as well as private equity, ownership structures and financing in general to be able to understand the wider purpose of property investment.
If you’re looking for an owner’s representative with over 30 years of experience working with investors to fulfil their investment requirements then look no further than Curzon Land and don’t hesitate to get in touch via email at cgreen@curzonland.com or call us at +44 (0)7948 979 490.
