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City Cribs

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on 22 August 2016

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Transcript of City Cribs

AirBnB Prices: 2 bed
£285
3 bed
£340
AirBnB Prices: 2 bed
£185
3 bed
£210
Tourist accommodation supply analysis
City Cribs properties
Market Analysis:
Tourist Accommodation
Hotels in London:
Smart, clean, modern, fun.
A City Cribs refurbishment
A City Cribs refurbishment
Living area split to create a second bedroom
City Cribs Portfolio
AirBnB Price:
2 bed: £285
3 bed: £340
Student Price:
£350 pw (incl. bills)
9 months cost
£13,650
City Cribs Portfolio
City Cribs Portfolio
AirBnB Price:
2 bed: £185
3 bed: £210
Student Price:
£300 pw (incl. bills)
9 months cost
£11,700
AirBnB Price:
2 bed: £145
3 bed: £170
Student Price:
£250 pw (incl. bills)
9 months cost
£9,750
Key concepts
• Central London properties
• Downsizing communal living to
create more bedrooms
• Renting to students for 9 months
• Renting to tourists for 3 months
January
February
March
April
May
June
July
August
September
October
November
December
Students: Semester 2
Tourists
Students: Semester 1
The Queen signed legislation in March that allows London residents to share their homes for up to 90 days a year without permissions or registration. The new rules overturned legislation drawn up in the 1970s.
Legalities of AirBnB
3 Types of Revenue Streams
Type I: Purchase properties
Type II: Take a head lease
Type III: Manage properties for fee
Financial Forecasts
Market Analysis: Student Living
Private Halls
Market Analysis: Student Living
Private
accommodation: Studio
2 Bed
Private
accommodation: Studio
2 Bed
Private
accommodation: Studio
2 Bed
Why target international students?
1) Will pay a premium for shorter contracts
2) Require more assistance - need a specialist service
Current issues for international students:
- Premium price for tenancy agreement shorter
than 12 month
- Estate agencies and landlords will either require a
UK guarantor or 6 months rent paid upfront
- Utility bills create frictions
- Inability to visit the properties from abroad
- Paying by international bank transfer can be costly
and lengthy
- Language barrier when moving
- Incoming students don’t know who to live with
City Cribs solution:
- Offer contracts per semester
- Guarantors will be checked internationally
- All utility bills will be included in the price, Internet
and TV will be already set up
- Provide virtual tours online
- Rent will be able to be paid by credit card each
month or bimonthly
- City Cribs website will be translated into multiple languages and City Cribs will employ multi-linguists
- Students will be able to book individual rooms in
properties
Marketing: Students
• Becoming housing partners for universities
• Social Media
• Student Cribs
House prices increased at an average of 8.3% p.a over the last 17 years
Inner London increased at 17% from 2014 to 2015 (CBRE, 2015)
Housing Market
Macro
Trends
• Slower yields in central London
Tourism In London
• In 2013, London was the most visited
city in Europe – over 16.8 million visitors
• Growth of 5.6% on the year before
• Summer the busiest period
• Undersupply of hotels
Student Market
• Total student population of 366,605
in 2013/14
• 26% of London Students are international
“We will roll out the red carpet to the
brightest and best... there is no cap on
the number of overseas students that
can come to study at our universities”
Market Analysis: Student Living
Market Analysis: Student Living
AirBnB Prices: 2 bed
£145
3 bed
£170
Marketing: tourist market
AirBnB optimisation
Social media marketing
Listing across many sites
Simulated fund
Assumptions
Students
Income
- Weekly price per room £250,£300,£350
- Occupancy of 95%
AirBnB
Income
- Range of price per night £145-£340
- Occupancy 85%
Costs
- Listing fees on AirBnB 3%
- £80 Council tax per month
Property costs
- Maintenance costs of £1000 per bed per year
- Utilities cost of £14 per bed per month
- Miscellaneous costs 1% of revenue from each property
Fund Fees
- Fund fee 1.25%
- Purchase fee 1.25%
- Airbnb Management fee 20%
- Students Management fee 12.5%
Exit assumptions
- 10 year fund
- Capital appreciation 8.3%
Levered case assumptions
- 60% gearing
- Debt raising fees 1%
- Interest only 5%
Property Details
- 9 new properties per year
Fund Return
City Cribs P&L
Thank you
Universities vs Yield
Gearing sensitivities
Capital appreciation sensitivities
Full transcript