Private Investors Realise It Pays to be a Lender

Green Street News features Firma Partners’ Head of Capital Markets, Omega Poole, as she explains that in an environment marked by ongoing uncertainty surrounding UK property taxation, private investors are increasingly pivoting towards real estate debt as a more secure, income-oriented approach to maintaining UK real estate exposure. This trend is reflected in recent data from UBS, which indicates that family offices have doubled their allocations to private real estate credit in 2024 compared to the previous year. Investors are attracted to the asset class's combination of asset-backed security, predictable returns and insulation from the burdensome operational complexities associated with traditional equity ownership of property.

For many investors, this transition represents a deliberate recalibration towards stability and consistent income generation. Private real estate credit occupies a compelling middle ground within multi-asset portfolios, delivering enhanced yield compared to public bonds whilst exhibiting significantly lower volatility than equities. The structure also enables investors to gain exposure to resilient sectors, including residential, purpose-built student accommodation (PBSA) and co-living, without the burdensome challenges inherent in direct property ownership.

In the current market environment, adopting a lending rather than ownership position allows investors to maintain meaningful real estate exposure whilst avoiding equity-related volatility and benefiting from robust collateral in sectors underpinned by strong fundamental demand. This approach offers a prudent pathway for investors seeking to balance income objectives with capital preservation within the real estate sector.

Private investors seeking to explore this opportunity can engage directly with Firma Partners, whose management team brings over £3.8 billion of UK real estate lending experience and a track record of zero capital losses, to discuss integrating real estate debt strategies into their portfolios.

Press: https://greenstreetnews.com/article/private-investors-realise-it-pays-to-be-a-lender