PR: How long have you been involved in property and what is your current role within the industry?
PP: I've had more than 15 years of experience in real estate investments, multi-asset portfolio management, investment strategy and risk management in the alternative credit area and previously held positions at HM Treasury and PWC in a research and assurance capacity and within the hedge fund sector managing credit arbitrage strategies. I have considerable experience in structuring property investments for clients to achieve exposure to the asset class in an economic and tax-efficient manner. I am responsible for idea generation, portfolio construction, rebalancing and risk management in loan portfolios at Reim Capital.
PR: What are the main advantages of development finance over traditional high-street bank lending?
PP: High-street bank lending is often not relationship-driven and their rigid lending criteria and slow timescales which often make them unfeasible for many clients. The alternative lending market has grown exponentially since the financial crisis in 2008 and recent figures from The Association of Short-Term Lenders (ASTL) show that bridging completions were £470m in Q2 2020. The data shows that applications increased by just over 1% in Q2 2020, compared to Q4 2019. Short-term lending addresses the need for borrowers with regard to speed, flexibility, product range, leverage and interaction with the lender.
PR: Aside from the usual risks associated with property investment, what new risks have emerged due to the current financial climate and how are you able to mitigate these for your clients?
PP: In the residential asset class, investors are facing numerous legislative changes which are safeguarding their tenants during the pandemic. This has implications on the liquidity of portfolios and extended recovery timeframes in a distressed scenario. In addition, the stimulus from the Treasury via stamp duty is coming to an end in March 2021 and Bank of England’s MPC may reconsider their stance on rates and stimulus package. As a lender, we consider the macro and micro factors of every project and will work closely with our borrowers to share our thoughts on their projects /portfolio regarding viability, timeframes and long term returns. Our goals are aligned as the robustness of our clients' assets affect our position and we have remained flexible with loan terms and redemption plans.
PR: What does REIM Capital do differently, what sets you aside from the competition?
PP: We understand every project is unique and has nuances which affect the risk and return dynamics for our clients and are adaptive in structuring solutions that provide our clients with the most robust funding solution.
Our current funding is not a derivative of a banking line which dictates our credit policy and funding criteria. We have the autonomy to consider a range of products and utilise our investor’s capital in the most dynamic manner to provide the best risk-adjusted returns. Development Finance is an area we see strong potential for growth. We partner with developers across the UK by providing development funding via a senior and stretch senior funding model. Our Investment sizes range from £1m up to 10M. With a combined 20+ years’ experience across property development, private banking, and credit, Reim Capital is well-disposed to understand and answer clients’ needs.
PR: How has the pandemic impacted client attitudes, are you seeing caution or more bullish behaviour amongst investors?
PP: We have seen bullish behaviour and continued strong activity in suburban properties as homeowners and tenants seek properties with private entrances, outside space and more space to accommodate home working patterns. However, caution remains on apartment complexes with communal areas for residential units, HMO and student living. Office and retail portfolio investors have seen some larger corrections as shopper footfall remain elusive and businesses have adapted to working patterns requiring reduced office space and costs
PR: What are your predictions for the sector going into next year?
PP: The evolving news regarding the vaccine and the speed of which it can be administered and be effective will have a significant impact on the sector moving forward. Its success will bring renewed appetite in the market and a return to normal operations regarding, viewings, conveyancing and completions. Pent up demand may cause more activity in the first half of the year and the likely beneficiaries are apartment complexes and shared living residences. We remain cautious in office as companies adjust their working patterns and remain selective on retail locations and tenant potential.
