Octopus Real Estate: building a property powerhouse
08 May 2019
To take advantage of the opportunities within the UK property market, Octopus has merged two businesses – Octopus Healthcare and Octopus Property – to create one business called Octopus Real Estate. Here we explain the thinking behind the merger.
Octopus has always believed in transforming broken industries. We do this by entering sectors where change is desperately needed and by offering innovative solutions to customer problems. It’s an approach that has served us well, particularly within the UK property market, where we have two businesses with enviable investment track records and a devoted customer base.
Octopus Property – one of the UK’s leading non-bank lenders
Octopus Property has been offering specialist property loans since 2008, and since then has lent more than £3 billion in bespoke flexible finance to landlords, property developers and property investors. Today it has a loan book valued at more than £1 billion. It’s an award-winning business, known for putting its customers first.
Octopus Healthcare – creating exceptional healthcare facilities
Octopus Healthcare has been at the forefront of investing in and developing properties exclusively for the healthcare sector, with a focus on care homes and retirement communities. The Octopus Healthcare brand was launched in 2014, but the business itself has a 14-year track record. The team currently has just under £1 billion funds under management in healthcare investments.
One plus one equals more than two
Both Octopus Healthcare and Octopus Property have demonstrated how product innovation, and a reputation for outstanding customer service, can help build market-leading businesses. But to fully capture the opportunity within the UK real estate market, we think a new approach is needed.
We’ve decided to combine these two specialist property-focused businesses to create a larger business with greater size and scale, affording it the opportunity to expand into new areas.
Introducing Octopus Real Estate
From 8 May 2019, Octopus Healthcare and Octopus Property will be known as Octopus Real Estate.
The combined business will have more than £2 billion of funds under management, supported by a team of more than 110 people.
Bringing both teams under one brand (and leveraging the skills within the combined businesses) makes good commercial sense. Having a larger team of dedicated property experts will ensure we can continue to innovate and develop products that support the evolution of the UK property market.
So, what will change?
For most customers of Octopus Property and Octopus Healthcare, very little will change. Existing customers and investors of both businesses will continue to receive the same level of great service, and their day-to-day interactions with the combined team will remain unchanged. However, the decision to merge the two businesses will also enable us to look at how we can innovate and bring new products to market, as well as creating efficiencies across the combined business.
And within their specialist areas, current activities will continue. For example, Octopus Real Estate will still be providing flexible property financing across the commercial, residential and development sectors. At the same time, the business will maintain its focus on investment and development in the care home and retirement living sectors, which continue to grow, and are as strong as ever.
Making the most of the new structure
Octopus Real Estate will be led by Benjamin Davis, the current CEO of Octopus Healthcare. It’s his job to make the most of the combined expertise to support the new business’s expansion plans across the real estate market.
As Benjamin explains: “All of the sectors of the real estate market we currently operate in have significant growth potential. Creating a more diversified real estate business will give us a structure that allows us to match our ambitions with added size and scale – leaving us best-placed to make the most of these opportunities. This approach also sets us up well for when we gain entry into new specialist sectors of the UK property market.
“We want to be able to offer innovative new financing solutions designed to meet the challenges of modern accommodation needs. At the same time, we believe in creating attractive investment opportunities for our investors. You can expect to hear a lot more about Octopus Real Estate in the future.”