Helping Britain’s smaller developers
Housing supply has taken centre stage as the issue of our times. At Property Partner we feel passionately about finding new means to increase rental supply, to support small and medium sized house builders, and to help Get Britain Building again. The way Property Partner operates means we have the rare ability to strike deals that benefit both our investors, and these smaller developers, simultaneously.
We’re proud to say that we have now taken our first step towards this vision with a direct deal with a small, family run developer called Nexus Build.
The investment covers four new build properties acquired in the historic seaside town of Hastings, and represents our first development outside London. You can view the Hastings properties by clicking below. Or read on to learn more about Nexus Build, what this deal means for their business, and their ability to continue building.
Our first small developer – a family business
Nexus Build is a family run business, and was started in 1989 by Stephen Finch. Since then, they have built 100 homes across London and the South East of England. As with any smaller developer, the main challenge that Stephen faces is cashflow, and the speed at which he could move on to his next project.
“As a small developer we need to able to move quickly once we complete a project, to free up our time and capital. In today’s business environment we found that this was the biggest challenge with high street lenders and local bank managers, who could make decisions in the past, are no longer able to provide fast decisions or finance.”
When Stephen came across Property Partner online, he realised that we could help solve many of the problems that he and other small and medium sized developers shared. Stephen was currently faced with the prospect of up to a 6 month wait to sell his newly completed development in Hastings, and this was preventing him from moving on to his next project. He decided to approach us in search of a professional purchaser for his remaining four properties, giving a fast cash transaction that would allow him to redeploy his capital on his next build.
“In Property Partner we found an experienced acquisitions team who, unlike traditional channels, were ready and able to move quickly. With no agents or intermediaries, we were able to negotiate the deal in under 2 weeks – which has allowed us to move on to our next build.”
How Property Partner can help smaller developers, and benefit our investors
Property Partner’s ability to move quickly, and our position as a large cash purchaser, provides several advantages for small and medium sized developers. To begin with, it removes the burden of paying for selling agents and expensive marketing suites. Furthermore, by speeding cash into the coffers of these developers, we enable them to clear debt faster, pay their contractors, and speed up the whole building process. This allows them to move to building the next development more quickly, helping to increase the volume of homes supplied to the UK market.
“A cash purchaser who can make a fast decision provides certainty and allows us to move forward with our next build – that’s crucial, and so refreshing in today’s climate.”
Property Partner acts as a cash buyer by underwriting every transaction: in the unlikely situation of a fundraising target not being met, or a mortgage being delayed, Property Partner will meet the difference. This gives certainty to property sellers that the transaction will complete quickly, and on the date committed, and it allows Property Partner to deliver more value to investors by negotiating price as a cash buyer. Standing behind each investment with our own capital also demonstrates our confidence in the investment case for each property.
All of these advantages save a lot of costs for developers, and have the additional benefit of allowing us to secure properties for our investors at a discount. It is a mutually beneficial relationship for developers and for investors – and an opportunity for small and medium developers around the UK to take advantage of, as Stephen describes:
“Given the cost savings, scale of purchase and ability to move fast, we could afford to sell the Hastings properties at a discount. We look forward to working with Property Partner again on future developments and believe that the model offers an exciting opportunity to other UK developers looking to find new innovative solutions to the delays in the current system.”
Take a look at the properties yourself, and decide if they’re the right investment for you.
If you’re a small or medium-sized developer and would like to see what we can do for your business, please get in touch here.