Gavin Eustace

Octopus targets £1bn residential development book within two years

Octopus Property is targeting a billion-pound residential development loan book within the next two years.

In an exclusive interview with Development Finance Today, Gavin Eustace, head of residential development at Octopus Property (pictured above), claimed that the division currently had a committed book of just over £500m across both the housing and Purpose Built Student Accommodation sectors.

This is an increase of circa 35% on this time last year, having committed to nearly £300m of development funding in 2018.

He said that he was “very optimistic” about the residential market.

“People talk about transaction volumes going down — and they are — but if you look at what first-time buyers are doing, these numbers keep on increasing.

“I look at that sector of the market and I go, ‘Right, we’ve got a shortage of affordably priced stock, we’re backing people delivering this stock, and I think there’s a huge market there for that to continue to grow.’”

Gavin claimed that the country was “nowhere close” to reaching the government’s target of 300,000 houses a year, and that Sadiq Khan’s goal of 66,000 new London homes every year was not being delivered.

With high levels of employment and low interest rates, he felt that it was a great market for affordably priced homes that people could buy.

“I think London’s prime property market got itself into trouble two to three years ago.

“But that’s not an area we’ve got any exposure to, we have deliberately stayed away from it.

“I’m confident about the market, and hence I look at the book and go, yes, we want to turn this into a billion-pound development book, and we have the team to deliver this.

“And I genuinely see the requirements there for it.”

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