Pratt has 40 years of experience in the UK residential property sector. He has worked at CBRE supporting the development of their residential platform and before this was Managing Director of Grainger PLC in the UK.
He is now a Residential Investment Consultant at PATRIZIA AG, an owner-managed company that operates independently of financial institutions and banks. An investor and service provider with around 800 employees PATRIZIA takes care of the entire real estate value chain across all segments of the real estate market.
Real estate funds can be a part of the development process for hospitality projects. In this TV show Andrew Pratt explains what Patrizia is all about.
Real estate funds and commercial investment businesses
Patrizia was set up in the mid 1980s, basically as a residential property company investing in residential property in Germany. Went through an IPO in 2005, now has over fourteen billion euros worth of assets, mainly in central Europe, fifty residential and commercial, we have thirty funds in Germany, we're the second biggest house builder in Germany as well now, the market in Germany's changing from being a, er, rental market to home ownership. Similar model to the UK. We act for a hundred pension funds across Europe - well across the world, actually. The strategy for Patrizia was to replicate that model, in the UK. Came into the UK, about - just under two years ago now we've been setting up both residential and conversion, commercial investment businesses.
Hospitality TV will continue to feature shows about real estate funds and development. Why not take a look at who else has been featured in the Hospitality250.
In Germany and in central Europe, we don't get involved in a lot of hotels, unless they're in a mixed use scheme. But, you know, we have similar concept, we have customers, that have to be satisfied, whether they be hotel guests or private tenants occupying our PRS units, and there's the issue of design, which is very similar, there's similar concepts on design, but obviously what a hotel guest wants and what a private rented sector tenant wants - who's likely to be occupying the room for a - well the room, the property - for a lot longer their needs are different, and so you know, there's a process one goes through in terms of design to make sure you've got the right, you've got the right concept there. The other piece is the sale of ancillary services. So, you know, hotels will, in most instances, have swimming pools, you won't have, you won't have that in a private rented sector block, unless it's prime central London. But actually, you know, there are rather, dry cleaning services, kiosks, there's all those sorts of things, you can learn, which is what the tenant want. But it's the communication piece, actually, with the customer and the owner, that's very, very important. And there is, for the private rented sector, there's a lot to be learnt, because the private rented sector is in it's infancy. The closest to that is serviced apartments. The serviced apartment industry is for, it there to serve sort of longer term guests, and is very close to the PRS, and there are some learning points there.
I've set the first student fund up in the UK in 2000, and if anyone said to us at that time that that was going to be a massive alternative asset class the way its grown, I mean you wouldn't have believed them. It's amazing the way that one has developed, and one of the main reasons it did develop was Nick Porta at Unite did a lot of R&D on what the customer wanted, so he made sure that the size of the unit was the right size for the student, that the services that the student got was exactly what they wanted and Unite have been incredibly successful as a result. And then now we're seeing some of these, interestingly hostel type operations, I mean they have existed, but of course now they're a bit flashier, 'cause they're actually what some of the student accommodation blocks, you take Edinburgh for instance, you know they have a reduced weekly tenancy, say forty two weeks in the year, the rest, they they, pack a single unit room, that they put six beds in. And they operate it on a hostel basis. Because one of the interesting thing with host - with hostels is, you can have a hostel without having a bar. Actually, as it happens, the bar is an important ancillary income source for the operator, whereas in the student accommodation you daren't have one! It doesn't go over particularly well, so, I mean every, every sector has a nuance. Private rented sector can be colossal in terms of the investment opportunities as compared to student housing. And actually as compared to hotels. You know, youngsters now, can't afford to buy their own houses, because the deposit that's required is enormous the mortgage market reviewer has made it difficult to get a mortgage, so actually the provision of rented housing in the UK is a massive need, whether it be affordable, whether it be mid-market, you know, for youngsters just leaving university it's got incredible opportunities and it will become within the next five years a major asset class, as hotels are.