#58 Tim Lumsdon, Founder and CEO of Marchmont Investment Management
Feb 1, 2024
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Tim Lumsdon, Founder and CEO of Marchmont Investment Management, discusses his journey into real estate, surface storage, and capitalizing on institutional inefficiencies. He shares insights on sourcing deals, the rise of private equity, and future growth opportunities in the UK market.
Tim Lumsdon started his career in real estate through work experience with a surveying practice and later founded Marchmont Investment Management focused on opportunistic real estate investment strategies.
Marchmont Investment Management identified a supply-demand mismatch in the market for surface storage, leading them to establish a dedicated industrial open storage fund and attract institutional investors.
Marchmont Investment Management remains positive about the real estate market, selectively seeking opportunities, focusing on tenant retention, and diversifying their exposure in logistics and the living space sector.
Deep dives
Career Journey and Real Estate Interest
Tim Lumsden shares how he got into real estate and pursued a career in the industry. He initially had a general interest in business economics and decided to do work experience with a surveying practice. This experience led him to pursue an estate management degree. He gained further experience with a real estate company and developed a strong interest in the sector. He then joined BNP Paribas Real Estate and later moved on to S.G. Commercial before setting up his own business, Marchman Investment Management, focused on opportunistic real estate investment strategies.
Surface Storage and the Industrial Open Storage Market
Marchman Investment Management identified a supply-demand mismatch in the market for surface storage, also known as industrial open storage (iOS). They observed that occupiers in this sector often had short-term licenses as they occupied sites waiting for development. Marchman saw the potential for rental growth in this overlooked asset class and decided to focus on it. They established a dedicated iOS fund, aiming to create an institutional-grade product and institutionalize the asset class. Marchman believes in the scalability and long-term potential of the sector, with opportunities to aggregate income streams and attract institutional investors.
Market Challenges and Selective Approach
The real estate market has faced challenges over the past year, leading to Marchman Investment Management being selective in their deals. They have observed motivated sellers and have been cautious about the occupational markets they invest in. However, they remain positive about the fundamentals of the real estate market and continue to opportunistically seek attractive opportunities. They focus on tenant retention and low vacancy rates within their existing portfolio. Marchman has also diversified their exposure through their management and development arm, exploring opportunities in logistics and the living space sector.
Building a Strong Capital Base
The podcast episode discusses the early stages of the business and how they focused on building a strong capital base organically. They emphasized the importance of crystallizing performance and improving the credibility of the business in order to grow further. The market's support and their ability to achieve a regulated entity status allowed them to solidify their track record and attract institutional capital. This led to a shift towards a more thematic approach in their investment strategy, particularly focusing on urban logistics and last-mile logistics themes.
Origination and Conviction in Real Estate Investing
The episode highlights the importance of origination and conviction in real estate investing. The team emphasizes the role of agents in sourcing deals and building relationships within the industry. They also discuss the significance of underwriting, understanding the market dynamics, and considering various scenarios. The team's focus on advancing income and adding value through asset management is highlighted, along with their efforts to reposition existing assets to meet ESG criteria. The team expresses excitement about the potential in the industrial and logistics sectors and their ability to leverage their expertise and network.
Tim Lumsdon Founder and CEO of Marchmont Investment Management.
Marchmont is a leading operating partner to institutional capital specialising in UK real estate strategies. He started his career with BNP Paribas Real Estate, before joining SG Commercial.
He went on to become a Fund Manager at Tritax before setting up the Marchmont business in 2011 and he is responsible for the overall business and investment strategy.
I sat down with Tim to discuss a broad range of subjects which covered some of the following topics: