February 21, 2018
We are delighted to be shortlisted at this year’s Property Week awards for “Property Fund Manager of the year” and what a better year then our quarter of century anniversary, 25 years of “Investing in People and Investing in Property”. 2017 was one of our most successful years to date.
The year started with a restructure to focus a) purely on the UK market and b) with the management buying more equity in the business, having decided not to accept unsolicited offers to buy the business.
In 2017, Palmer Capital has successfully raised £340m of new equity for funds under management. This includes the launch of two value-add funds. The firm also increased core portfolio by c. £50m (44%) in 12 months and acquired one of the single largest logistics deals of 2017, in Peterborough – the Debenhams distribution warehouse for £86.5m, on behalf of a Middle East mandate.
Palmer Capital is renowned for its unique network of operating partners which, after a two-decade search, 2017 was finally the year we fulfilled our long held ambition of backing a property company in the North West. Harlex Property, headed up by James Nicholson (former Kier Property and Argent Development Director) and based in Manchester. This network, built on long term partnership and entrepreneurship, provides access to deal flow and now 8 of the best in class asset managers for projects funded through the investment management activities. No other UK Fund Manager has this unique investment in Property Companies, a network built over the last 25 years.
This network has led to the launch of several ground-breaking projects in 2017. One of which was one of the largest manufacturing deals of 2017, a joint venture between Rolls-Royce and two of Palmer Capital’s property companies, Manse LLP and Opus Land to redevelop 200 acres of manufacturing land near Coventry at Prospero, Ansty Park. Hitting the national headlines at the end of November, the JV agreed a letting to Meggitt PLC for a c. 450,000 sq. ft. / £130m new facility, creating over 1000 jobs to form the next-generation of aerospace innovation and R&D, driving the long-term future of Meggitt’s UK manufacturing capability. This particular deal is the largest Midland’s industrial development for over a decade.
The combination of new capital and the widening of our property company network gave us firepower to transact on over £243m of property acquisitions in 2017. Our focus has been on creating assets that will flourish as the UK population grows, creating high quality real estate to meet tomorrow’s technological demands, and repositioning assets to meet new retail distribution channels.
Investing supported by underlying demographics remains at the heart of all of our strategies to deliver investors a better return when adjusted for risk. In 2017 through to 2018 one of our key focuses has been acquiring redundant commercial land for conversion to residential. The stark undersupply of housing coupled with the upward pressure on The Government to alleviate the housing crisis has driven our focus on this strategy. We are perfectly placed to exploit this opportunity with our local network keeping us at the sharp edge of creation with deep access to local knowledge, politics and relationships.
Another area we have focussed on is technology and the need to future-proof our buildings against accelerating obsolescence. We have focused on better design and management to service our tenant’s needs and to treat them as customers. An example of this thinking coming to life was at our 100,000 sq. ft. office development at Bristol’s Finzel’s Reach, Aurora, the only speculative office building currently being developed in Bristol. Aurora, was awarded the first BREEAM Outstanding ranking for an office building outside of London and one of only six in Britain. Here we are in the process of building a drone pad to adapt to the demands of our occupiers. Aurora has been 40% pre-let in 2017, 6 months ahead of completion.
In addition to this, we have recently appointed a Director of Innovation, who has been charged with the task of standardising, automating, digitising and capturing Palmer Capital’s business intelligence data in a single repository, which will inform our thinking on how best to leverage all the data points that Palmer Capital have access to.
So, why should we win this award?
We are not the largest fund manager – but we are one of a kind. Nimble and focused, the only Fund Manager in the industry who combines both an investment management platform with minority shareholding stakes in 8 property companies. We have a unique attitude to investment management with entrepreneurship and partnership at the heart of everything we do. We have remained resilient to the waves of uncertainty and achieved two value add fund launches this year and a substantial increase in excess of 50% to our core portfolio. We only manage client capital for either core / low risk mandates or where we take high levels of property risk with low or no leverage i.e. speculative development or planning led strategies.
Our residential land planning track record remains market leading, with a success rate of gaining 99% of residential planning consents for over 4500 units across the UK. Our relationships with corporates has gone from strength to strength evidenced by the likes of Rolls Royce, Unilever and Pfizer. We have adapted our investment strategies having recognised the inertia of our occupiers, the increased office use density, automation of jobs and the end of the government hub programme reducing occupational demand and the potential for rental growth. We have seen this as an opportunity to proactively alter our service offering, focusing on urban asset development and adapting to the fundamental shift of treating our tenants as customers.
We are an innovator and are embracing the digital revolution, standing at the front line, making the first steps on our digital journey both at the property level and at the corporate level.