David Kaye

An interview with David Kaye: There is 'huge scope' to grow the retirement living asset class



In an interview with Development Finance Today, David Kaye, CEO at Puma Property Finance (pictured above), talks about care homes, co-living and underserved areas of the development finance market.


Care homes are an asset class that a lot of lenders won’t touch. Is there a need for more funding in this area and why do you see an opportunity here?

Some lenders are deterred by the operational aspect of care home developments — that you’re lending to a working business — but there are plenty of experienced operators in this space and a huge accommodation shortfall to meet. It’s true that care homes are more complex than a typical residential development but, at Puma, we’ve lent to developers of operational real estate for more than a decade — from care homes to hotels and student accommodation — which is why we’re comfortable with this asset class. In total, we’ve provided £100m in loans to fund care homes, supported living and retirement developments and, as well as lending development finance, we also offer post-completion loans to help support operational businesses as they establish themselves.

Co-living is a sector currently in its infancy. Are you interested in providing funding for this — if so, why?

Younger professionals face real challenges when it comes to the unaffordability of housing, with the growth in rental prices putting pressure on their incomes. Co-living is attractive because it gives renters an all-inclusive cost and, in today’s sharing economy, the combination of private living areas with communal facilities is growing in appeal. We’re seeing this new model gain traction in cities around the world and there are attractive opportunities in the UK. Having completed student accommodation developments, we see co-living as an extension of this area and are certainly interested in providing funding for this asset class.

What areas of the property development market do you believe are underserved and why?

Hotels and retirement living developments are both underserved. We’ve found that major hotel brands have significant appetite to expand their footprint in the UK, and alternative models, such as serviced apartments, are also growing. As these are operational real estate businesses, some lenders are put off by the trading risk, but we’ve been developing hotels for a long time and understand the drivers for these transactions and how to manage risk effectively. Reflecting on the opportunities in this space, we recently completed a £17.5m loan to develop a Hampton by Hilton hotel at Edinburgh airport and a £7.5m loan to complete an Ibis hotel at Luton airport.

There’s also huge scope to grow the retirement living asset class, as there’s a huge lack of high-quality properties for those who want to downsize and liquidate their real estate assets. Meeting this need will be key to unlocking stagnation in the housing market — and it’s an area we’re very active in across the country.

What one thing would you like to change about the property development industry?

The planning system needs significant investment and reform. While it’s not the fault of those who work in this field — who are typically capable, professional and dedicated — the underinvestment caused by budgetary constraints dramatically reduces the planning system’s efficiency. Our developers suffer enormously, experiencing significant delays in obtaining planning or amendments to planning, so this is an area I’d like to see change.

How did you get into the industry?

I practised as a barrister for several years, focusing on real estate and finance. While I loved the work, I wanted to take a more active role in business rather than come in as an adviser, typically called upon when things had gone wrong. I decided to join an investment bank months before the financial crisis — genius timing! However, fortunately, we had great opportunities to deploy capital by acquiring, financing and asset managing real estate in Germany. 

Having spent several years focused on the real estate investment side — often looking at deals through the lens of the borrower — I had the opportunity to establish Puma Investments and then Puma Property Finance, developing a lending business focused on professional developers. Having been the borrower on many real estate transactions, I understand borrowers’ frustrations with the lengthy processes of unreliable lenders. We try very hard to be the antithesis of that for our developer clients. 

If you weren’t in finance, what would you be doing?

I love what I do, but if I were to do something else, I’d probably be making wine — and maybe checking it for quality control.



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