Uma Rajah

An interview with Uma Rajah: We believe in the resilience of prime central London property

In an interview with Development Finance Today, Uma Rajah, co-founder and CEO at CapitalRise, talks about perceptions of London’s prime property market, underserved areas and challenges this year.

Why are you undeterred by the negative perception surrounding the prime London market?

As experts in the prime London market, in our various guises we have weathered multiple property downturns over the years and are confident in our ability to adapt our lending strategies at any point in the cycle. What’s more, we fundamentally believe in the proven resilience and enduring strength of prime central London property as evidenced by research from Savills, showing prime central London property coming back strong.

Our experienced developer clients are using this point in the cycle to their advantage. Despite Brexit uncertainty, London still retains its international appeal as a leading global city, and we believe that prime property prices will start to recover over the coming months and years.

We stand out in the prime property finance space as our team’s deep knowledge of the market enables us to review the merits of each project on a case-by-case basis, with an understanding that no two properties in the prime space are equal. Our ability to deliver bespoke finance solutions to our customers is unique in the market as many traditional lenders take a blanket view of prime and are unable to offer finance against high-value single assets with high pound per square foot values.

How do you feel about the recent rules introduced to P2P lenders?

We’re committed to transparency and ensuring that customers receive all the information they need and fully understand the risks before deciding to invest their hard-earned money, so it’s really encouraging to see these rules being extended to P2P lenders as they are crucial for the protection of investor interests and the successful future of the sector.

Overall, it’s really positive to see standards being raised across the industry; it evens out the playing field and allows platforms with first-class due diligence to thrive, offering increased investment choice and control for eligible customers, while injecting capital into markets that were previously starved of finance.

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

More transparency in the market — particularly with so many new lenders moving into this space — would benefit borrowers, lenders and investors alike. The need to share information and data, to ensure that all parties are aware of past and present performance, on an impartial basis, is crucial.

It would also be great if the property development industry, as a whole, were to embrace tech-enabled processes in order to make end-to-end transactions more streamlined and efficient. Transaction times seem to be slowing down rather than speeding up and with the technology available today, this feels counterintuitive. Using technology to work collaboratively with partners will simplify processes and help to speed things up. We hope that ongoing education around the benefits and efficiencies of tech solutions in our industry will help to increase the number of property businesses using them.

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

UK banks significantly decreased their lending to property developers following the global financial crisis a decade ago and this, in particular, has affected the prime property development market.

Traditional lenders are often wary of lending against high-value single assets with high pound per square foot and shy away from complex ownership structures with multifaceted security structures, due to the desire to be volume driven. We identified the growing need for quick, efficient and cost-effective financing for loans up to £10m in the prime residential segment of the market and our stretched senior development and mezzanine products are some of the most competitively priced in the market.

What do you think will be the biggest challenges for the development market this year?

Continued uncertainty in the property market seems inevitable while we wait for a final decision and action around Brexit. Nobody can prepare for the possible outcomes or consequences while we don’t have clarity on the UK’s direction, and we’ve noticed that a number of developers are currently riding out the uncertain atmosphere with a ‘wait-and-see’ approach.

Further to this, we’ve seen a general lack of volume in the market, with transaction numbers low as sellers’ and buyers’ price expectations are not aligned.

How did you get into the industry?

Prior to joining CapitalRise, I spent 10 years in product development roles in the fintech space, creating pioneering lending platforms that disrupted their relevant sector through speed and efficiency.

My co-founders at Finchatton approached me to help them launch a platform that dramatically improved the fundraising process for proven developers by removing all the stress points that they had personally experienced. I saw this as a fantastic opportunity, as prime real estate lending was totally undisrupted and ripe for it.

By leveraging Finchatton’s development expertise, coupled with my fintech background and our lending team’s traditional real estate financing know-how, we have been able to create bespoke products that meet the demand for quick, reliable and cost-effective finance.

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

My working life at CapitalRise spans three large and exciting sectors: finance, technology and property. To be honest, I can’t imagine doing anything else right now, as I really enjoy launching and scaling innovative digital financial solutions that disrupt traditional markets and truly benefit customers.

What’s great about the fintech sector is the speed with which it grows and learns. You can take an idea and launch within months — meaning you can start learning and iterating much faster than in most other sectors.

If I wasn’t in finance, perhaps I’d be helping to shape tech innovations in another area of the property market, as property is such a traditional sector and right now it’s truly ripe for disruption.

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