As a manufacturer creates value by assembling raw materials into a finished product, property investment companies add value through the asset management process.
Experience from previous investment cycles, shows us that asset management becomes a more important component of total investment returns when yield compression starts to slow. In other words, it’s no longer sufficient to rely on timing and movements in the wider market.
Add to the mix better informed and more discerning occupiers and the property owner needs to be on top of their game. Understanding the regional micro-markets and matching these to occupier needs is crucial. In a crowded marketplace, the ability to refurbish, reposition and relaunch is key to attracting occupiers.
For example, Queens House in Glasgow is now let to a diverse range of occupiers including start-ups, small to medium-sized enterprises and up-and-coming brands like Brewdog. The catalyst to this was our vision to continue to create space that meets the needs of today's occupier. The space and indeed the occupancy of the building has been completely transformed.
We are currently at 95% occupancy (with terms agreed on the remaining suites) and we are currently shortlisted for the BCO (Scotland) Best “Refurbished/Recycled Workplace” Award 2016.
This success is not unique to Queen’s House. We have enjoyed similar success in other markets, for example at Merchants House in Chester, Angel Gate in London and 401 Grafton Gate in Milton Keynes, where we have repositioned space.
All of these assets are now let to a diverse set of occupiers from a wide range of sectors. Rents have also moved upwards as the supply and demand balance has changed.
Ultimately, our buildings are our product and the ability to improve our assets, is of paramount importance to our future success and generating attractive investor returns.
The Picton Team