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Real Estate PRS

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Residential property in the UK has never seemed a more attractive investment. With a shortage of quality rental properties available and development struggling to keep up with demand, there is tremendous competition for the right assets. Nevertheless, there are opportunities available, and the returns on a good, well-managed scheme can be attractive - particularly to commercial clients looking for long-term income generating investments.

At CMS, our lawyers have worked in the residential sector for over 20 years. We are also one of the few law firms with representation on the BPF’s Residential Committee. This track record gives us a real understanding of the market. We act as a sounding board for a wide range of commercial clients, offering pragmatic advice and solutions to help them navigate the complex issues, regulation and taxes peculiar to the private residential sector.

We regularly advise commercial clients on issues relating to forward funding/forward purchasing on a leased or direct-let basis, development and property funding.

The right tax advice is essential in the PRS, given the complexities around VAT (particularly in relation to forward funding) and we have a dedicated real estate tax team which covers the whole of the UK. We also have resource in areas such as data protection, employment and eviction, and are able to offer commercial clients advice in relation to investment, acquisition and forward funding, joint ventures, asset management and disposal.

We have carried out some of the largest PRS transactions in recent years, acting for a number of significant commercial players in the market. For example, we acted on behalf of RBS in the sale of their GBP 210m residential portfolio to the US private equity firm, Apollo. The transaction involved the sale of some 1650 PRS units and 150 ground rent units, with 163 assets from individual flats and houses, to groups of flats and houses ranging to blocks with up to 160 flats across Scotland, England and Wales, making it one of the largest PRS transactions ever to take place in the UK. We also advised Aberdeen Asset Management’s Aberdeen Property Trust on one of the largest ever single purchases of existing stock in the PRS in the UK – the GBP 60m acquisition of 180 Stratford High Street.

High­lights of our Ex­per­i­ence in PRS in the UK
The Wellcome Trust on the man­age­ment of the South Kens­ing­ton Es­tate, a large res­id­en­tial es­tate com­pris­ing thou­sands of res­id­en­tial ten­an­cies. GI Part­ners on the form­a­tion of its joint ven­ture with...
Law-Now: Real Es­tate
Vis­it Law-Now for leg­al know-how and com­ment­ary
Ad­vising the Board

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06/09/2022
Band­width: En­abling change
06/07/2022
Re­pur­pos­ing Real Es­tate: The fu­ture of the world's towns and cit­ies
A rad­ic­al re­think for glob­al prop­erty – and where we live, work and play As the real es­tate world emerges from the pan­dem­ic it is clear that all around us the urb­an land­scape is chan­ging. Many prop­er­ties are ob­sol­ete but also have ex­cit­ing fu­tures with new uses. Our town centres and cit­ies are un­der­go­ing fun­da­ment­al change – which all adds up to a world fo­cused on Re­pur­pos­ing Real Es­tate.Now in its tenth year, our Real Es­tate Thought Lead­er­ship series has covered top­ics such as the rise of in­ter­na­tion­al in­vest­ment in the UK, the growth of tech, the fu­ture of the of­fice, the rap­id rise of in­dus­tri­al & lo­gist­ics and the ar­rival of build-to-rent as a ma­jor as­set class.This year, with the Gov­ern­ment hav­ing pub­lished its Lev­el­ling Up & Re­gen­er­a­tion Bill, we fo­cus on the fu­ture of towns and cit­ies not only in the UK but in a series of key glob­al in­vest­ment hubs: Ger­many, France, the Neth­er­lands, Spain, Singa­pore and the United Ar­ab Emir­ates.After two years of lock­downs, work­ing, shop­ping and so­cial­ising at home, a de­bate is ra­ging about the fu­ture of town and city centres. Will they re­cov­er? How will they look in ten years? Will urb­an­isa­tion go in­to re­verse? And what does this mean for the real es­tate world?In `Re­pur­pos­ing Real Es­tate’ we provide the first an­swers hav­ing polled more than 300 lead­ing in­dustry pro­fes­sion­als and al­most 15,000 glob­al con­sumers.The res­ults are fas­cin­at­ing: al­most a third of real es­tate is ear­marked for con­ver­sion – with re­tail and of­fices to hous­ing the most pop­u­lar choices. Con­sumers want more green and open space, hav­ing spent too long con­fined to their own homes.But the good news is that in­vestors, hav­ing come through the pan­dem­ic, are still con­fid­ent in real es­tate as an as­set class. The big changes will be in what prop­erty they in­vest in, mean­ing the places we live, work and play in may be very dif­fer­ent in the years to come.
19/07/2021
Ma­jor in­dustry sur­vey re­veals ex­tent to which tech­no­logy is re­volu­tion­ising...
Over 4,000 glob­al in­dustry lead­ers, of­fice oc­cu­pi­ers, renters, re­tail de­cision makers and life sci­ences pro­fes­sion­als con­sul­ted in biggest in­dustry sur­vey of its kind to un­pack how, where and why tech­no­logy...
19/07/2021
MA­JOR IN­DUSTRY SUR­VEY RE­VEALS STARK CON­SEQUENCES OF REAL ES­TATE’S £6 BIL­LION...
In­dustry lead­ers be­lieve pen­sion funds will take a hit as a res­ult of the con­tin­ued ex­ten­sion of the morator­i­um on un­paid rent, which won’t sup­port ten­ant re­cov­ery in the long term  The de­cision by...
15/07/2021
Where tech ad­op­tion and COV­ID col­lide
We asked the real es­tate sec­tor of­fice oc­cu­pi­ers, renters, re­tail­ers and life sci­ences busi­nesses what im­pact COV­ID-19 is hav­ing on de­mand for real es­tate in their area, and also on ad­op­tion of in­nov­at­ive tech­no­logy.The sweet spot for in­nov­a­tion and de­mand driv­en by COV­ID-19 is life sci­ences, where both the oc­cu­pi­ers and the real es­tate pro­fes­sion­als see equally pos­it­ive op­por­tun­it­ies. Driv­en by spec­tac­u­lar tech­no­lo­gic­al break­throughs like COV­ID vac­cine de­vel­op­ment, and with pub­lic and private sec­tor fund­ing pour­ing in­to the sec­tor, life sci­ences is an as­set class in the up­per right quad­rant, very much em­bra­cing the op­por­tun­ity.By con­trast, in-store re­tail is `stuck in the head­lights’ ac­cord­ing to our polling – be­set by fall­ing de­mand caused by lock­downs and less likely to have ad­op­ted in­nov­at­ive tech­no­logy as a res­ult of COV­ID. In­ter­est­ingly, real es­tate pro­fes­sion­als are sig­ni­fic­antly more pess­im­ist­ic about real es­tate de­mand from the sec­tor, than re­tail­ers them­selves. This may be a re­flec­tion of in­creased de­mand for lo­gist­ics space as a res­ult of the ac­cel­er­ated shift to on­line shop­ping.While real es­tate pro­fes­sion­als see of­fices as the most act­ively in­nov­at­ing in re­sponse to the pan­dem­ic, oc­cu­pi­ers are less con­vinced, al­though they also seem less pess­im­ist­ic about de­mand for of­fice space. This per­haps re­flects the real­ity of a blen­ded work­ing ap­proach which looks here to stay in the im­me­di­ate fu­ture.The build to rent sec­tor, by con­trast, is seen as `lucky’ by renters who see that de­mand is strong but do not be­lieve they are see­ing enough in­nov­a­tion in the light of COV­ID-19 rather than re­devel­op­ing tired prop­er­ties.
15/07/2021
Pan­dem­ic spurs ac­cel­er­ated trans­form­a­tion
Many people have spec­u­lated over how quickly COV­ID-19 has ac­cel­er­ated tech­no­lo­gic­al ad­op­tion with­in real es­tate – but now we have a view from more than 4,000 in­dustry pro­fes­sion­als, of­fice oc­cu­pi­ers, renters, re­tail ex­perts and life sci­ences pro­fes­sion­als: five years.Across all groups this is the most com­mon pre­dic­tion al­though the mean re­sponse is four years. The im­pact of lock­downs and the need to rap­idly em­brace tech­no­logy is ex­traordin­ary: how many people used Teams or Zoom for busi­ness 18 months ago?
15/07/2021
Ro­bot world and the roar­ing 20s
Ar­ti­fi­cial in­tel­li­gence (AI) and ma­chine learn­ing, 5G IoT, vir­tu­al/aug­men­ted real­ity and ro­bot­ics are con­sidered the com­ing forces among real es­tate cus­tom­ers, which be­gins to ex­plain how tech­no­logy is ex­pec­ted to ac­cel­er­ate change in the sec­tor dur­ing the 2020s.These are pro­found changes which will not only im­pact how key in­dus­tries are man­aged but also how they oc­cupy real es­tate – and who oc­cu­pies real es­tate on their be­half. In­ter­est­ingly no one tech­no­logy scores over 50%, sug­gest­ing views are di­vided on which in­nov­a­tions will have the most im­pact on the real es­tate over­all.Tools such as Amazon’s Al­exa have re­moved the mys­tique from AI as people have real­ised that it can make their lives easi­er, and it is per­haps not sur­pris­ing to note that the highest ac­cept­ance of this tech­no­logy is in ar­gu­ably the most tech-ad­vanced sec­tor – life sci­ences.
15/07/2021
Real es­tate em­braces data – at last
Real es­tate as­set man­age­ment is now data-rich, hav­ing for many years re­lied on a dis­par­ate set of met­rics and a haphaz­ard ap­proach to meas­ure­ment.Giv­en the value of most prop­er­ties, this is sur­pris­ing, be­cause mar­gin­al gains can make a huge dif­fer­ence, par­tic­u­larly across a large port­fo­lio if this level of dis­cip­line is re­peated.It is no sur­prise, there­fore, that data col­lec­tion is seen as a key tool as own­ers battle to meet tough sus­tain­ab­il­ity tar­gets.At the same time, oc­cu­pi­ers are also see­ing the be­ne­fits of data col­lec­tion, par­tic­u­larly around the op­tim­al use of space. Yet again, the life sci­ences world is at the cut­ting edge of this think­ing.
15/07/2021
Real es­tate bounces back
Re­cov­ery of the real es­tate mar­ket is well un­der way, with op­tim­ism rising and a vac­cine-promp­ted bounce pro­pelled fur­ther by two power­ful forces driv­ing the sec­tor’s fu­ture: tech­no­logy and ESG.
15/07/2021
A new di­vide for of­fices
Tech­no­logy and an in­nov­at­ive ap­proach to sus­tain­ab­il­ity and well­being are set to se­cure the fu­ture of the of­fice. In a world where the of­fice now has to com­pete with the com­fort of work­ing from home, it needs to find a new pur­pose to per­suade people to re­turn to the com­mute, at least some of the time.
15/07/2021
Yearn­ing for a re­turn to the of­fice grows
People miss the of­fice, the hu­man in­ter­ac­tion it pro­motes and the clear bound­ar­ies that of­fice life cre­ates between per­son­al and pro­fes­sion­al life.In many or­gan­isa­tions, it has been young­er people who have lob­bied hard­est for a re­turn to the of­fice, un­able to work sat­is­fact­or­ily at home and miss­ing the op­por­tun­it­ies and so­cial in­ter­ac­tion that of­fice life presents.As city centres be­gin to work out a new fu­ture, tech­no­logy will be at the heart of the de­bate, with the more fa­vour­able build­ings al­low­ing people to work seam­lessly and con­nect with col­leagues around the world at the same time as giv­ing a feel­ing of safety and se­cur­ity.With ‘the di­git­al work­place’ now con­sidered the new work­ing en­vir­on­ment, em­ploy­ers need to both em­bed the phys­ic­al im­ple­ment­a­tion of smart tech­no­logy in their build­ings and to en­sure the vir­tu­al work­ing ex­per­i­ence trans­forms the em­ploy­ee ex­per­i­ence by fos­ter­ing ef­fi­ciency, in­nov­a­tion and the so­cial ele­ments that many people crave in their work­place.
15/07/2021
A tech-driv­en trans­form­a­tion
The in­creas­ing im­port­ance of tech­no­logy and di­git­al­isa­tion has come to the fore through­out the COV­ID-19 pan­dem­ic, par­tic­u­larly in the of­fice mar­ket but also in life sci­ences, build to rent and lo­gist­ics.