Regeneration has been my favourite strategy for the past 20-odd years of investing. It’s one of the few ways to outperform the overriding market through sheer change in fundamentals.
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Here are the 7 factors that contribute to the biggest returns in both values and rents.
Clearly Funded Regeneration Project: Make sure that the regeneration is actually funded and not just with planning permission. Years or decades could pass before the site benefits from regeneration.
Convoy’s Wharf in London was approved with outline planning for 3500 homes in around 2005, however, in 2023, the site is still vacant land.
Large enough scale: If the impact is too small, then the regeneration may not have a big enough impact on your values and rent.
Broad based development: Ensure that this is not just a new residential building, the best regeneration is broad based across residential, commercial, leisure, shopping, schools, transport, and employment.
Take a long view of the investment: To get the full benefit, you need to buy in early. you need to buy in early and hold throughout, the property is likely to have superior fundamentals for at least a decade or two before, if no further investment comes, the area loses its shine.
Proven developer that can handle scale: Rarely can new, less-established developers create the type of change that is required to make regeneration work.
Of course, any regeneration will have a varied mix of the above, not every area has them. Trust us: Regeneration is a powerful strategy when done well.
Live with passion,
Brett
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