Family Offices: Investing in Real Estate that Diversifies Your Portfolio

Discover lucrative property investment strategies for family offices, from HMOs to serviced accommodation with expert guidance on building a robust real estate portfolio.

Exploring Family Office Real Estate Investment Opportunities

Family offices represent a growing and fairly sizeable market in the UK and globally. Recent statistics suggest the market reached a $5.17 billion valuation in 2024, and is poised to reach a $9.26 billion valuation by 2034 (growing at a CAGR of 6.7% between 2025 and 2034). These businesses handle strategic wealth and investment management services for high-net-worth individuals and families, and are becoming increasingly influential in the global financial ecosystem. According to Deloitte, there were approximately 8030 family offices around the world in 2024, with projections suggesting this could grow to roughly 10,720 by 2030.

Family offices across the UK increasingly recognise the potential of property investment to secure their long-term growth and success. As these established family offices look to diversify their business interests, the property sector offers compelling opportunities for portfolio expansion, particularly in the growing market of HMO (Houses in Multiple Occupations) developments.

With the UK economy showing promising signs for 2025 (as predicted by the KPMG UK Economic Outlook), including projected falls in inflation and base interest rates alongside anticipated GDP growth by over double, family offices are well-positioned to expand their property portfolios, and encourage their clients to make smarter investments in the same vein. Despite current UK property market challenges, including housing supply issues and fluctuating demand levels, strategic property investments can provide stable returns and long-term value appreciation. 

As interest rates and costs gradually decrease month by month, a pickup in investment is expected in 2025, meaning that growing family offices may find themselves in a prime position to begin expanding their premises.

Expanding Your Family Office Portfolio

Family offices are just like any other business in the sense that their expansion and scaling goals remain potentially lucrative if methodically planned. Investing in quality real estate remains a pivotal ingredient in such a strategy, regardless of their clients’ sector(s) of operation. 

While traditional property investments remain valuable, the rather unpredictable UK property market (both domestic and commercial) demands investors and buyers to be willing to adapt and apply an innovative approach to secure new offices at the best possible price. 

Family offices investing in real estate have numerous responsibilities and legal hoops to jump through, from ensuring the property complies with relevant regulations to ensuring the property is not going to pose any health, safety, or personal injury risks to tenants. This commitment to quality protects their ‌investment while enhancing the property’s long-term value and appreciation.

The first and most important step is to conduct comprehensive, in-depth research to understand local market demands.

The Appeal of Traditional Commercial Offices

When beginning their expansion strategy, many prospective buyers might instinctively try to find serviced offices. These can no doubt be valuable and cost-effective, giving buyers an insight into local market dynamics and finding suitable, maintained premises in ideal locations. 

For many buyers, the benefits of fully serviced offices can be enough to take the proverbial leap, not least due to the minimal maintenance required and optimised, modern aesthetics that give their business a professional and contemporary appeal. However, others may look at estate agents in London to gauge the property market and research other options. They might also prefer the idea of securing less conventional properties for a potentially more cost-effective price.

The Compelling Case for Investing in HMO Properties 

HMO developments can make for great family office infrastructure, helping buyers achieve superior yields compared to traditional buy-to-let properties. Working with experienced, knowledgeable and professional property development service providers ensures that each investment aligns with a family office’s short- and long-term objectives. Such guidance becomes invaluable when navigating all the complexities associated with property renovations, surveying, upkeep and ongoing maintenance.

The HMO sector presents a unique and enthralling opportunity for family office real estate investment. According to recent Lendlord data from Q4 2024, HMO property values range from approximately £125,000 to £660,000, with Greater London dominating the market share and higher average property values (with the South East coming in second). The average HMO yield across regions remains at 10.4%, with the North East leading at yield percentages of 15.4%.

The top three regions (Greater London, North East and West Midlands) represent 47.5% of the entire HMO market, equating to roughly 1,126 properties. The aggregated and analysed data suggests that the price-to-rent ratio is highest in Greater London at 6.5 years, the lowest in the North East at 2.7 years and an average of 4.2 years. As a result, Greater London HMO properties suggest a lower return on investment versus the North East (15.4% to 37% respectively), suggesting the North-South divide and incomparable recovery periods as reasons for this. Therefore, if you’re in one of the top-performing regions for HMO properties, there may be no better time than now to begin browsing available real estate.

Other Property Types to Consider

If HMOs are not on your property investment agenda, consideration should be given to other types of properties worth investing in.

There is a case to be made for investing in traditional buy-to-let homes or flats and turning them into offices. Owning one or more buy-to-let properties as investments, there are processes and procedures in place for turning them into limited company premises. If you hold one property, it is possible to move it to a limited company via a sale, though that does come with tax considerations ranging from Stamp Duty Land Tax (SDLT) to Capital Gains Tax (CGT) as well as other financial liabilities.

Additionally, short-term lets and serviced accommodation projects can also provide excellent returns, even in high-demand areas, for businesses wanting a bit more flexibility and easy access without being constrained by long-term tenancy contracts. Serviced apartments, aparthotels and corporate housing offer a wealth of advantages that complement family offices, from additional space and privacy to serviced on-site and accessible amenities and facilities.

Taking Action on Your Property Investment

No decision about family office property investments should be taken lightly or instinctively. Expert and strategic guidance should be consulted at the earliest possible juncture. At HMO Architects, we understand the unique requirements of family office portfolios and can help you navigate the complexities of property investment with complete confidence and peace of mind.

Book your free, no-obligation property strategy call today to discuss your specific requirements and discover how we can help you achieve your investment goals. Our team of specialists will provide personalised insights tailored to your family office’s objectives.