How we choose a building, and the ones we turn down
We buy one building per syndicate, entirely with investor equity, so the lot has to work on its own merits with no debt to flatter it. Lot size, pitch, covenant, unexpired term, reversion, condition, energy compliance and a credible exit all have to hold together. Most stock we see fails on one of them.
Written by Edward Harrowsmith, Director, Investments. Last reviewed September 2026.
Lot size, and the arithmetic of an equity-funded syndicate
Every syndicate is funded entirely by investor equity. That removes a lender from the process and it also removes the option of stretching for a lot we cannot fund outright.
The structure sets the boundaries. The minimum stake is £25,000, no participant may hold more than 25%, and the median syndicate has fifteen participants. A lot therefore has to be large enough that no single holder is pushed through the 25% cap, and small enough to place in a reasonable period out of a finite pool of certified investors.
Two kinds of opportunity, and the pitch underneath both
We do not buy one type of building. Part of what we place is long income: an institutional full repairing and insuring lease, a blue chip or public sector covenant, and enough unexpired term that the income is not a near-term question. Those holdings are meant to do very little.
The rest is bought because we believe we can improve it. A lesser covenant on a short lease where we think the lease can be regeared, a passing rent sitting below our view of reversionary rent, or an underused building where upper floors or a second use would add value. Each of those is bought with a plan and a defined exit, and capital growth rather than the running yield is the point.
Which of the two a building is, and what the plan is if it is the second, is set out in the marketing material at day one, before anyone commits anything. Investors then choose which buildings to take and which to decline, so the balance between steady income and value add across a holder's own position is theirs to set rather than ours.
Pitch decides retail in both cases. We look at footfall on the specific frontage, the adjoining occupiers, the side of the street, and whether the unit trades well now rather than whether the town does. A prime pitch in a modest town is usually a better holding than a secondary pitch in a strong one.
We read the break profile as the real term. A fifteen-year lease with a tenant break at year five is a five-year income for pricing purposes. Rent deposits, guarantees and any reversion to the landlord's hands at break are all priced rather than assumed away.
Reversion, condition and capital expenditure
We prefer stock where the passing rent sits at or below our view of reversionary rent, on evidence from recent lettings on the same pitch rather than on asking terms. Where the passing rent is above the market we assume it falls at review or expiry.
Condition is priced before exchange. An FRI lease transfers repair to the tenant, though it does not make a tired building let well at the next void, and it does not stop a dilapidations settlement arriving as cash instead of works. We allow for capital expenditure over the anticipated hold rather than treating year one's net income as the whole picture.
Energy compliance, service charge and site management
EPC ratings and exposure under the minimum energy efficiency standards are checked at appraisal, and the cost of improvement works sits in our underwriting where a rating is weak.
On multi-let stock and business parks we look at the service charge history, the recoverability of it, and whether the site is realistically manageable at distance. Poorly documented service charges and disputed apportionments are a common reason to stop work.
Exit
We buy what we expect to be able to sell. That means a lot size with a deep buyer pool, a tenure and lease structure a purchaser's solicitor will not struggle with, and a location we can evidence. Even so, a syndicate holding is illiquid. There is no ready market in a stake, a sale can take time, it may not be possible when a holder wants it, and a holder may get back less than they invested.
What we decline
We decline short unexpired terms with no reversionary case, single-let buildings with a weak covenant and no alternative use, stock with an energy rating we cannot economically improve, buildings with structural problems we cannot price, sites with contamination or access issues that a purchaser will discount at exit, and lots where the service charge or site management makes the net income unreliable.
We also decline lots that are simply too large to fund without debt, which a buyer using debt will take.