Our Approach

Nottingham, England

Investment Opportunity

L1 Capital believes the outlook for U.K. residential property (excluding London) offers a compelling opportunity. The combination of high rental yields, low borrowing costs and attractive long-term supply-demand dynamics makes for an attractive investment case. The investment strategy is centred on purchasing large blocks of day-one income generating, tenanted apartments in Tier-1 U.K. cities (such as Birmingham, Manchester, Leeds, Nottingham and Newcastle).

Investing in the U.K. property market provides a highly predictable stream of distributions to investors supported by rental income. U.K. rental prices (U.K. nationwide average) has proven to be stable and resilient to economic downturns and has not experienced a year of negative growth to date.

Investment Strategy

Our strategy is focused on investing in existing and modern residential property in major U.K. cities (excluding London) that provide an attractive and reliable income stream with the potential for capital growth. The Fund typically purchases in bulk and is able achieve a discount to retail value and a discount to replacement costs which provides strong downside protection.

As part of the due diligence process, we complete a comprehensive market assessment (‘macro’ and ‘micro’ location analysis) and an assessment of the operational upside. We seek to add value by bringing capital to assets that have been underinvested historically in order to increase rental income generation and accelerate price appreciation.