Consulco has launched Sparta Capital Properties – a new vehicle that will build on the success of its predecessors

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Consulco continuously successfully manage and launch London real estate funds, offering a rewarding relationship from which out high net worth clients can gain and prosper.

Structuring And Managing Global Wealth
Consulco manages London Real Estate Investments for high net worth individuals

To date, Sparta has acquired two investments in Ealing and Camden. Ealing, a west London suburb, will be served by Crossrail and Sparta has acquired a retail unit located between the train station and the shopping centre. Sparta has also acquired a restaurant in Camden located between the main retail pitch and Regents Park - this has significant development potential.

Consulco has reopened the fund to allow additional investors to participate in Sparta.

About Consulco

Consulco is an independent trust services and investment management group operating since 1993 and managed by Marios Hajiroussos, Dmitry Khenkin and Elena Hajiroussou.

At the same time, Consulco Real Estate team, affiliated firm of the Consulco Group, is seeking further property investments and has created a strong deal pipeline.

After three UK elections and the historic vote to leave the European Union, it is a good time to reflect on the successes of Consulco Real Estate and to look at what the future might hold.

Our Strategy
Our strategy has remained consistent throughout the last 7 years with four core concepts:
1. Geography - focus on strong locations that enjoy a high footfall but which are not super-prime
2. Sector - focus on restaurants, bars and retail units where the tenants are responsible for the fit-out
3. Crossrail - target neighbourhoods with Crossrail stations
4. Adding Value - seek investments which provide opportunities to add value

The portfolio now comprises 30 individual investment properties, located mainly in Soho, Covent Garden, Farringdon and ‘trendy’ east London - together these properties have a value close to £100 million.

Executing the Strategy
The Consulco Real Estate team correctly forecast that demand from tenants for well-located retail and restaurant units would grow from a relatively low base - allowing Consulco’s funds to ride the ‘coffee shop’ revolution that inner London has enjoyed. The type of properties acquired, typically converted Victorian residential, provide the ideal floorplates for the casual dining and take-out sector. Consulco buildings host many of the chains that have expanded rapidly over the past 7 years and which have driven rental growth eg Leon, Costa Coffee and Bill’s.

Fund returns have been ‘turbo-charged’ by the selective acquisition of assets close to new Crossrail stations. Crossrail is a new railway line that will connect Heathrow with the West End, the City and Canary Wharf. It will transform rail transport in London, increasing central London rail capacity by 10% and bringing an extra 1.5 million people within 45 minutes of central London. As tunneling did not start until 2012, Consulco was able to acquire assets where the upside had not been fully priced in. Over 60% of investments acquired sit within 250 m of a Crossrail station - particularly Tottenham Court Road and Farringdon, but also Ealing, Paddington, Bond Street and Customs House.

But the Consulco Real Estate team does not ‘let and forget’ - instead, Consulco actively manages the properties it acquires. Where possible, Consulco will change tenants to those with a stronger financial base; extend properties to increase lettable floor space; change use to a higher value and refurbish to increase rental value.

At South Molton Street, Consulco secured vacant possession, changed the use of the upper floors to residential and added an extra storey. The team is currently on site at Charterhouse Street where it is splitting a pub into a separate ground/basement unit with independent flats above. The construction work involves a substantial basement excavation, rear extension and new top floor.

Strong Returns
A combination of a strong strategy, excellent stock selection, active asset management and judicious use of debt has resulted in impressive returns. The Hermes portfolio, acquired in 2010 and 2011, has generated average annualised returns of 30%, after all costs and taxes. The assets acquired have enjoyed yield compression and strong rental growth – over 5.5% per annum across the portfolio.

So what does the future hold?
It is difficult to forecast how the market will react once Brexit is implemented. However, Consulco has mitigated risk by holding assets in strong locations, popular with locals and tourists alike. The 2012 Olympic Games showed the attractions of London to a worldwide audience and visitor numbers continue to increase.

The acceleration of co-working, dress-down work and the widespread acceptance of coffee shop meetings is likely to fuel further demand for casual dining in units on busy streets.

The opening of Crossrail will add to the attraction and visitor numbers of key central London locations. Farringdon Station will be one of the busiest in the UK, connecting with Thameslink and the London Underground to provide links with outer London, the home counties, the City, Canary Wharf and London’s three main airports. When complete, Tottenham Court Road will see more than 200,000 passengers passing through the station every day.

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Marios Hajiroussos
Consulco
+357 22361300
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Dmitry Khenkin
Consulco
+357 22 361300
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