A MAJOR Scottish property investment firm – with an estimated £400 million worth of assets under management – has started a new fund, despite a tumbling UK property market.
Mark Hunter, head of Hunter Property Fund Management (HPFM), has revealed that he plans to take advantage of falling market prices.
Hunter has also launched a smaller specialist fund aimed at acquiring and redeveloping retirement homes in Scotl
and and the north of England.
Last year, HPFM sold the assets of its £100m Private Property Fund. He liquidated the fund at the top of the market. "I probably got nervous too early, as it happens, but better that than the other way," he told The Scotsman.
He also plans to grow the new Performance Property Trust to £100m or more, but expects it will grow slowly this year. The new fund's first purchase was a £5m industrial estate in Sheffield.
"We might make another acquisition this year we might not. This is really going to grow and build next year. Investors will, hopefully, feel by then the worst is passed. But I suspect we will be bumping along the bottom in terms of the market until we have a better banking climate."
HPFM's new retirement home fund, the Hunter Healthcare Property fund, is projected to have a maximum life of eight years and it has made its first acquisition, a care home in Edinburgh. It has 32 residents, with plans to increase this to 48.
Hunter will target retirement properties in need of modernisation and refurbishment in a market where properties tend to be owned and managed privately.
"We are going to buy homes that are probably a bit substandard, that need upgrading and improvement, that probably have some land where you can extend and really transform them into good, modern-day homes," Hunter said.
"Quite often, there are issues with owners not having the capital or the appetite to embark on a major programme of improvement."
The investor will also turn developer. Taking advantage of troubled housebuilders who need to sell land to raise money – Hunter plans to develop new retirement homes.
"Land looked a bit trickier before the housing market had a slide, but building land has got a bit cheaper now," he said.
"We might be able to compete with the housebuilders, indeed we may even be able to buy some land from them."
In an unusual step for a property developer, HPFM will also manage the care home, ensuring residents are able to stay put while remodelling is taking place.
For this, HPFM has teamed up with healthcare property specialist Ian Davie. They will then "churn" the property, selling it to a care home operator or an investor and return the capital to investors.
"What we are doing is using Ian's expertise, so we choose to develop in the right areas the right kind of homes and make sure we hit the market," said Hunter.
"The barrier to entry to a lot of people doing this is managing the home in the interim period, and also knowing where the demand is and knowing what to develop."
The full article contains 525 words and appears in The Scotsman newspaper.
