There’s nothing wrong with having a small army of finance professionals managing a private investment portfolio. Bankers, property consultants and lawyers all have their place, but as investors get more creative and diverse — and assets get harder to come by — alternatives are in order. Real estate holding firm as the world’s favourite asset class and London holding on to its elite position is a cocktail that is increasingly demanding alternatives. Enter Hanover Private Office.
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When most of us think of private bankers, the assumption is that only the likes of Bill Gates demands those services. But that’s not the case all the time, argues Alex Newell, managing director at Hanover Private Office. “It’s the idea of a private bank but in managing property wealth. Residential property around the world, but commercial as well: office blocks, luxury hotels and so on,” he explains. “We can act and advise people on why it’s a good deal, why it’s bad. It’s about focus, quality of service and quality of advice.”
Hanover isn’t a real estate agency and it’s not an investment bank; it falls somewhere in between. And contrary to popular perception they do indeed service clientele in the £1 to £5 million market, many of them expatriates scattered around the world and planning to return home as well as UHNWIs. Hanover offers broader knowledge, property management, planning and permits for developments as well as simple home sales among other services in central and on the periphery of London, and Asian investors are increasingly among the firm’s clientele. Hanover’s London properties will always be popular, but more and more projects like the Sandylands country house, the Wick Lane estate in Englefield Green and South Drive, all in Surrey are gaining traction. High prices and low yields in the city are inspiring investors to look farther afield, and regardless of sales volumes, Asian buyers are indeed interested in houses.
Ebb and Flow
“One, it’s cyclical. It happens every cycle that as prices rise to such an extent that yields are put under pressure and capital growth slows people do look elsewhere,” theorises Newell of the sudden shift away from London. “Investors ask ‘What’s the closest to London I can get but get a better yield or more value for money?’ Generally because of Heathrow and the M4 motorway lots of people want to go west. It’s full of old market towns, which are now villages that have grown, with plenty of luxury property,” he notes.
Farther from London, Manchester is also making waves and getting attention, but Newell’s partner, Director Rory McGougan remains cautious, or at the very least patient. “There’s a lot of incentive for the UK government to [spotlight] the Powerhouse that is going to be the north of England, but people forget that’s going to take 10 or 15 years. For anyone looking for an immediate yield, they’re not going to get it,” McGougan points out. “There are still areas that surround prime central London and they are emerging prime markets, including outside zone 2 and places like Stratford. If investors are looking for yields, they’ll focus on those emerging prime markets. You’ll get a higher yield than in PCL but also higher appreciation than outside the M25. Manchester, Birmingham, Newcastle all provide very good yields but they only go up in capital value by 2 or 3 percent a year on a good year.”
Newell and McGougan are on one of several trips per year they make to Hong Kong and other parts of Asia in servicing their clients — another perk of the private office manager — which totals roughly 10 percent now. A Hong Kong office isn’t out of the question one day, but for now they’ll be frequent fliers.
Despite central London’s appealing fundamentals, the city’s more far-flung spots are beckoning investors and the latest is Manhattan Loft Gardens in east London, in Stratford. Developed by Manhattan Loft Corporation, the project is continuing the developer’s mission of bringing New York style loft living to London.
“It’s very much in the early stages; they’ve just broken ground. It’s located right in the heart of a new urban location in London, which was relatively untouched and where the Olympics were in 2012. There’s a huge focus on it and it’s a fantastic bit of design. It will be the stand-out tower in the entire area,” says Hanover Private Office Director Rory McGougan. Manhattan Loft Gardens, designed by SOM Architects, sits in the heart of a booming new neighbourhood featuring Queen Elizabeth Park, new university campuses and the infrastructure the Olympic Games brought to the former industrial district. “A great deal of money was spent getting the infrastructure right first and there’s a big tech area developing,” continues McGougan. “It’s not as focused as Old Street, but it’s still attracting firms. The Guggenheim is presenting its first full time residency outside the United States in the area, and there are all the facilities left over from the Olympics: football stadiums, an amazing park, swimming facilities and a Westfield shopping centre.” Values in Stratford rose 18 percent last year, making it one of the city’s best-performing sub-markets.
When completed Manhattan Loft Gardens will feature 248 flats in a cantilevered tower, boasting three gardens at different levels, a seven-storey hotel, uninterrupted views on the top 15 floors and transport links at Stratford station that take residents to Bond Street in 10 minutes and to Paris in under two hours.