This might be the smallest fund but it has possibly the biggest potential.
Again provided by Harcourt Capital funds are available for sub-market rents with no requirement for social housing organisations to provide an income guarantee. With below market rents and huge housing shortages, this is the future. But for now investors need to see proof that there really is no ‘demand risk’ before taking any risk themselves.
We believe that this replicates the Student Housing experience whereby, due to initial uncertainty of demand risk, universities had to provide investors with income guarantees, in the way currently required of social housing organisations. Once the market began to mature, investors recognised that there was little underlying demand risk and now the majority of student housing investments place demand risk with the investor.
We therefore have funds available in 2017, for the right deal in the right location, but we are certain that in the future there will be significantly more once evidence of little demand risk is proven.