The Rodcast - Property, Business, Investment

Jo Seth-Smith is the Investment Manager at Olim Property https://www.olimproperty.co.uk/index.html an FCA regulated property investment manager of UK commercial property portfolios, whose Funds Under Management total is approximately £1 billion with individual discretionary mandates for pension funds, investment trusts and Oxford colleges.

Jo has a heap of experience in Commercial Property Investment starting her career at JLL, La Salle Investment Manager and then moving on to for part of the team that created Acuitus Commercial Property Auctions before joining Olim Property.

In this discussion Jo and I discuss;

How Jo came to be involved in the investment side of Commercial Real Estate.

Different types of sellers and buyers at commercial property auctions and differences in approaches between institutional investors vs private sector investors.

Why institutional investors decide to sell at auction.

How the structure of a typical institutional real estate portfolio has changed over time.

As an investment manager how does the clients needs dictate the sectors that you look to invest in.

Where her focus in terms of asset types has changed over the past few years.

The importance of not just reducing risk for clients but also reducing costs.

Valuations when transactional evidence is low and how that can affect decisions to sell.

Theory vs experience.

The delay between cause and effect on asset prices happening in the market.

Cost of living crisis effects on covenant strength of occupiers of commercial property.

Difficulties in forecasting future rents.

Difficulties in achieving historical yields in certain asset classes.

How ESG factors into Jo's decision making when making investments and how that has changed over time.

Policy and Government changes and their effects on investments.

ESG and box ticking.

Advice to people looking to get into the industry.

And lots more...

Thanks again to our sponsors https://www.konnexsion.com who provide fantastic property management software and 978 Property finance https://978finance.com/ who provide finance for all property deals

If you enjoyed the episode please be sure to follow on whichever platform you listen or view on. Reviews are always welcome.

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Before we get started, I’m delighted to say our next Property Business Workshop on 4th July only has 10 tickets left.

This time Adam Lawrence and I will be taking on: The fundamentals of property investment. Risk mitigation and control. Relevant investment metrics. Differing secured debt arrangements and loan structures – and – Scaling your property portfolio/business – why, when and how?

Thursday 4th July, in a Central London location (Blackfriars). Let’s face it – there’s nothing else on that day apart from a rout. Early Bird tickets are running out – and thanks to the early bookers who make it viable to book a room and organise the event – we reward them with 10% off! There are tickets still available here: http://bit.ly/pbwthree

Now to this episode.

Mike Kovacs from Castleforge is always a fountain of knowledge when I talk to him and this time was no different. I love his data led research approach to investing in different use classes and geographies.

In the episode we discuss what Mike has been up to since we last spoke on the Rodcast a few years ago in episode 72 https://shows.acast.com/5d72784e408342486f3e10c1/633ee475050f5400123d2eaf

We discuss;

What has happened in terms of people being back in the office and how that differs in different markets.

Structural differences in Markets that technology cannot fix in the office market.

What has happened to Traditional office leases over the past couple of years.

Flexible office market and how this is changing.

We Work' s effect on the London flexible office Market

Regional office markets.

How commutes affect office demand.

Office costs as a percentage of a Businesses costs and how that has changed.

Security of income in Flexi offices.

What investors should be concerned about in regards to metrics.

What office investors can learn from Hotel investments.

The parts of the office market he focuses on and why.

Why investors are only now realising the operational efficiencies of old school investments have changed.

How Covid affected the Hotel market and why they felt it was the right time to get into hotels.

How they chose the type of hotels and locations to invest in.

Issues with the capital structure of some Hotels.

Why Hotels have a track record of keeping up with inflation so well.

What are the factors and some examples of what they look for in locations for Hotels.

The effects on Hotels on the short term let and holiday let market.

Why their residential arm "Ocasa" focuses on lower to middle market and affordable products.

Barriers of entry in lower value residential areas.

How they built a portfolio of over 2,250 residential units.

How to look at the addressable market.

The cost of Development.

Cost of Living and how that is affecting affordability for renters and what they do to mitigate these risks.

Operational costs of operating a residential portfolio.

he ongoing costs and investment metrics needed in residential investment.

Should operations be split from ownership?

How regulation is affecting operational costs.

The problems of investors realising they are running a business.

Options for tired landlords.

The future of Data Centres.

How energy markets affect Data Centres.

Why there are supply constraints in Data Centres.

Different types of Data Centres and what to look for in a building or location for a good investment.

And lots more

Thanks to our sponsors www.978finance.com & www.konnexsion.com

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Joined again by Adam Lawrence and Manish Kataria we each pick a specific investment that anyone can do in their ISA or pension and explain the reasoning behind it.

As well as our picks, we discuss;

Pound cost averaging,

changing a portfolio for retirement

Bias to home nations

How value vs growth has performed

Nominal vs real numbers.

How long do you hold specific investments for and what makes you make a decision to sell or not.

Rod's pick is one of the Vanguard lifeStrategy funds which is 100& in equities with a bias to UK and USA. https://www.vanguardinvestor.co.uk/investments/vanguard-lifestrategy-100-equity-fund-accumulation-shares/overview

Adam's pick is Developed countries small cap value ETF https://www.ishares.com/ch/professionals/en/products/317548/ishares-international-developed-small-cap-value-factor-etf

Manish's pick is an energy ETF with a weighting towards American Oil producers https://www.google.com/finance/quote/XLE:NYSEARCA?sa=X&ved=2ahUKEwj71Jn_sb6DAxWOQUEAHYwHCCUQ3ecFegQIKBAX

For more info about the Boardroom Club please email me [email protected]

For information about finance for property investors regarding mortgages and development& bridging loans please contact our sponsors 978 finance [email protected]

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I spoke with Daryl Norkett the Head of Real Estate Proposition at Shawbrook Bank, one of the biggest Buy to Let and property investment lenders to discuss how mortgages work from the banks point of view.

You can also watch this episode on our youtube channel https://youtube.com/@rodcastITP?si=MbqPWAGHJEmlvcfZ please don't forget to subscribe and hit the bell icon.

This episode is vital listening for investors concerned about mortgage costs and who want to understand which factors affect pricing.

With the emphasis being on SWAP rates for the last year or two, hear how deposit led banks could be affecting mortgage pricing in this higher rate environment

Daryl gives a great run down of what has been happening in the mortgage market over the past 12 months.

What he feels needs to happen in order for mortgage rates to go down and what the time lag between those events happening and the price cuts occurring will be.

What makes some lenders pull mortgage deals while others wont need to.

How the high arrangement fees on many mortgage products affect the banks risk in terms of loan to values.

And lots more ...

How National Insurance cuts and fiscal drag can affect property investors portfolios in different ways.

If you have requirements for Buy to let mortgages, commercial mortgages, Development loans or bridging Loans then please contact [email protected] our sponsor who has done an amazing job of financing all aspects of my portfolio.

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In this episode I run through the points of the Autumn Budget that are relevant to the Property Industry including parts that were not in Jeremy Hunts speech.

Largest ever increases to minimum wage.

LHA increased to 30th percentile of local rents.

Freeze on how Business rates are calculated and the discount in leisure, retail and hospitality is extended.

£3mil invested into pilot schemes to improve the process of buying and selling homes.

A consultation to start early next year on a new PD right to split a house to 2 flats.

Annual Tax on Enveloped Dwellings (ATED) to increase by 6.7%.

Guaranteed accelerated planning decisions on big developments in exchange for a fee.

Local development orders to speed up planning decisions for key commercial developments.

£110 million to deliver schemes to offset the stall on nutrient neutrality.

Affordable Homes Guarentee scheme to expand by a further £3billion so HA's can access cheaper loans for developing new homes.

£450 million to local authority housing fund to deliver 2,400 new homes for refugees and help homelessness.

£120 million for homeless prevention.

Mortgage Guarentee scheme extended for 18 months which allows buyers to borrow 95% LTV.

To read the Autumn Budget notes in full you can download this document file:///Users/rodturner/Downloads/DOC-20231122-WA0019..pdf

As always thanks to our sponsors 978 Finance. If you are looking at finance please contact [email protected]

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