Download to read offline
Uploaded byCFG
1E - Property Management - Christine Janaway & Jon Wright
The document discusses property management for charities. It emphasizes the importance of ensuring property assets are financially sound and fit for purpose. It provides guidance on short and long-term strategies for reviewing property portfolios, including identifying core and surplus properties, restructuring leases, and planned maintenance. Keys to successful property management include establishing clear responsibilities and allocating necessary resources. A case study shows how Mencap acquired care homes on a sustainable business model that reduced rents but provided a secure long-term income stream, benefiting both parties.
More Related Content
Similar to 1E - Property Management - Christine Janaway & Jon Wright
1E - Property Management - Christine Janaway & Jon Wright
- 1. Property Management Christine JanawayBruton Knowles Jon Wright, Mencap
- 2. Contents Introduction Charity Commission Guidance Fitnessfor Purpose Keys to success Quick Guide to property investment Case Study – Mencap
- 3. Charity Commission Guidance Hallmarks of an Effective Charity Hallmark 5: Financially sound and prudent “An effective charity has the financial and other resources needed to deliver its purposes and mission, and controls and uses them so as to achieve its potential”
- 4. To think about… Property – is it an asset? • Operational • Financial Property – or is it a liability? • Unsuitable • Insufficient • Unsustainable • Obsolete
- 5. Not fit forpurpose? Short term • Identify core property • Review -SSS • Identify surplus property • Assess liabilities/opportunities Medium term • Restructure leases • Realise assets where viable • Add value to portfolio • Planned maintenance/development
- 6. Keys to success Creating an effective property portfolio Establish Board/Senior Management responsibility Identify necessary resources • Internal • External Set project plan Implement Review
- 7. Quick guide to….. Property Investment What is the investor actually buying? 1 - ££££££ 2 - ££££££ 3 - ££££££
- 8. Quick guide to….. Property Investment Example 1 Example 2 Rental income £100k pa Rental income £100k Tenant – say pa Sainsbury’s Tenant – say Joe Bloggs Value?? Ltd Value??
- 9. Quick guide to….. Property Investment What is the investor actually buying? ££££££ Investment yield spread “junk bonds” “gilts” Where does property lie on this line? Is it even on this line?
- 10. Quick guide to….. Property Investment What is the investor actually buying? ££££££ Example 1 Example 2 Rental income £100k Rental income £100k pa pa Tenant – say Tenant – say Joe Bloggs Sainsbury’s Ltd Yield?? Yield??
- 11. Quick guide to….. Property Investment Yield drives value Based on – Covenant (tenant) strength Rental income Property type and location
- 12. Case Study -Mencap Mencap acquisition of the care homes on sustainable business model based on the principle that yield drives value Background Existing leases Landlord’s (ie. Funding bank’s) requirements Mencap’s agreed terms
- 13. Case Study -Mencap Mencap’s perspective • Rent reduced by almost 30% • Removal of rental escalator • Secure and financially sound business model Landlord’s perspective • Lower yield • Long term confidence in the income stream • Improved capital value – from £15 to £20m • Better funding terms from bank
- 14.