Who are the Moorfield Group and what do they do?
We are a UK-focused real estate, private equity fund manager. We raise PE funds from US, European and Japanese investors to invest in UK real estate. Since 2005 we have raised five funds with over GBP 1.5bn of equity.
We currently manage three funds, one of which is dedicated to senior living and owns Audley, the UK’s leading retirement village business.
In our other two funds we invest across all the different asset classes in UK real estate, but we are well known for investing in the more alternative subsectors, principally student accommodation, BtR, senior living and emerging asset classes.
Where in the UK do you invest?
We don’t start from a geographic perspective, but the location does of course need to be a good one. We’re looking predominately for needs based, demographically led investment opportunities, where growing demand and limited supply is driving price and rental growth. These assets have enormous potential but will also perform better in a potential downturn environment, on a relative basis, compared to other sub-sectors.
This strategy has also led us to the logistics sector where the rise of online retailing has led to growth in demand for distribution warehousing.
In recent years we have been investing in BtR in Manchester, Liverpool and Newcastle and in student accommodation in regional cities with strong and growing universities.
Our senior living investments have been all around the UK but weighted to the commuter belt area around London.
We refer to our current strategy as being focussed on ‘beds and sheds’, which came from looking at societal shifts for new ideas and opportunities.
We would love to invest more in London but finding value is hard and competition is fierce.
What projects are you currently engaged on?
We are developing senior and student accommodation schemes because there is a lack of supply. We aim to achieve high returns for our investors so we need to take a degree of extra risk through development to create the product that we think will be in demand for the occupier and for buyers.
Our typical business plan is for five years. We will either develop or re-position an asset, i.e. change the planning consent or asset use class from something that is redundant and not performing to something that is in demand.
The Keel in Liverpool is a good example. It was an empty unloved office building, so after gaining a planning consent for change of use we converted it into a for-rent residential scheme of 240 apartments, which opened in 2015. We leased it in full and then we sold it in 2018. As far as I am aware this was the first ‘round trip’ for any BtR project in the UK. There were many interested buyers in the asset, particularly from institutional money.
Are our senior housing needs changing?
Our ageing population is a demographic time bomb.
Over 80-year olds will treble in the next 30 years. With advancements in medicine and healthier lifestyles, there are more people entering retirement age now than ever before.
This group is also the wealthiest cohort of our society – typically owning their own homes and having benefited from decades of house price inflation. Over 60s own GBP 1.5tn of UK housing equity, while only 1% of them live in specialist retirement accommodation, compared to 17% in the US.
Increasingly we are finding that this age group is looking to downsize and to release some of that equity from their home – for numerous reasons, from the house becoming unmanageable and wanting to use that money for their future care, to helping their children and grandchildren with a deposit so they can buy a home.
Audley is targeting that trend and creating beautiful places to live, with the sort of facilities that you have at a country club.
By making it an aspirational decision, we can motivate older people to take this step for positive lifestyle reasons, instead of waiting until it becomes a necessity due to care needs.
Residents at Audley developments enjoy access to bars, restaurants, spas and swimming pools along with a community of like-minded people.