BROWNFIELD – SUCH A DISMAL NAME!

It isn’t a glamorous sounding opportunity is it? Brownfield investing, not up there with terms such as ‘Alternative’ or ‘Gold’ or ‘Futures’ or ‘Options’. Whilst those names are more exotic they are also normally extremely speculative, Brownfield investing, chosen correctly is not. So can it be the ‘Diamond in the Rough’ – simply put the answer is yes!

‘People think of brownfield land as being mucky, but it isn’t always’ states Alex Munro of Knight Frank. Buying Agricultural land is an investment in the future, buying brownfield is an investment in the here and now. The UK government is committed to the redevelopment and regeneration of their inner cities and this often takes theĀ form of a brownfield site (a site once having a previous use e.g old school, petrol filling station, industrial sites etc). Brownfield sites are given planning concessions and priority to develop and so the turnaround time from purchase to ‘market ready’ to find a buyer can be very fast – often less than 24 months.

A site with the highest potential for exceptional capital return is one which is ‘occupier-led’. This means the site is almost guaranteed to have a buyer and the planning process is driven towards what that buyer is planning to develop – be it Student Accommodation, a Hotel, homes for the PRS (Private Rental Sector) etc. Large institutional investors, both foreign & domestic, are hungry for yield and so they have a large appetite for the PRS sector and Student Accommodation sectors alike as they can achieve their aim of strong yield’s for their investors along with future capital appreciation. The competition among these Institutions is high and so the right brownfield site with the right future development potential can achieve very high returns.

It is therefore important, as with any investment, to investigate further. Look at the people behind the Brownfield project. Do they have a track record, do they have the relevant experience and expertise, do they have contacts with the right potential buyers once planning is approved, are they open and transparent about the costs involved, these are all questions which need answering.

But, investment into the right Brownfield project can deliver exceptional capital gains – ‘where theres muck there’s brass’ as the saying goes.

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