Mid-year reflection — 2023

Half a year on from our largest acquisition to date, we wanted to share a brief reflection on the market we are buying into and the discipline we are trying to maintain through it.

The first half of 2023 has been defined, more than anything else, by the cost of money. Successive rate increases have moved the goalposts for almost every buyer in the market — ourselves included — and the conversations we are having with vendors today look very different to those we were having twelve months ago. Properties are sitting on the market for longer, asking prices are being revisited, and a clearer separation is emerging between motivated sellers and aspirational ones.

For long-term investors, we believe this is a healthier environment than the one that preceded it. The buying frenzy of 2021 and 2022 made it almost impossible to underwrite an opportunity sensibly. The current market, by contrast, rewards patience, careful analysis and the willingness to walk away — qualities that sit at the heart of how we have always tried to invest.

Our focus for the remainder of the year is twofold. We are progressing the development plans for the portfolio acquired earlier in the year, working closely with our advisors to secure the right consents and to maximise long-term value for the local community. Alongside that, we are reviewing a steady pipeline of opportunities — many of which were unaffordable to us a year ago and are now firmly back within our underwriting framework.

If you are exploring how to position a portfolio in this environment, or have an opportunity worth a second look, please get in touch. We would be glad to hear from you.