Sometimes growth means letting go
An investor buys a portfolio of flats, develops it further and then sells it. Why, of all things, does he part with properties whose potential he has only just unlocked? Because a successful investment is not judged by how long you hold onto it. The fact that growth and sales can go hand in hand is demonstrated by the Residential Investor Survey published by Cushman & Wakefield in April 2026. 40 per cent of respondents are focusing on growth with planned sales, up from 32 per cent the previous year. Behind this lies a simple realisation: the size of a portfolio is not an indicator of quality. What matters is what the tied-up capital can still generate in the future.
The dangerous tendency to hold on to what you have
Anyone who has successfully managed a property for years knows its strengths. The rent comes in, and demand is strong. So why change anything? Because familiarity is a poor basis for investment decisions. A block of flats can provide stable returns and yet still be in need of costly refurbishment. Perhaps the costs can only be partially recouped through higher rents. Perhaps another location now offers better opportunities. Anyone who keeps the building is, at the same time, ruling out these alternatives. Even doing nothing ties up capital. The crucial question is therefore not whether the purchase ten years ago was the right decision. It is whether one would buy the same property again under today’s conditions. Anyone who cannot provide a convincing answer to this should review their hold strategy.
Not every modernisation adds value
At first glance, investing sounds like the right answer. A modern heating system can improve a building’s long-term viability, whilst converting an attic can create additional living space. However, the financial implications vary considerably. Some measures merely preserve the existing structure. Others actually increase the rental income or market value. The limitations are particularly noticeable in the residential sector. Construction costs remain high, and modernisation levies are regulated. A technically sound refurbishment may be of little economic appeal. That is why it must be clear at the time of purchase what potential a building offers and how much it will cost to realise it. Simply implementing every possible improvement is by no means a guarantee of successful value creation.
Sometimes the best buyer has a different strategy
Let us take a portfolio of flats that a professional investor has modernised and successfully let out. The major development stages are now behind him. To achieve further increases in value, he would need to invest a great deal of capital. A sale may now be a sensible option, even though the properties are performing well. After all, what marks the end of a development phase for the current owner may be the start of an attractive investment for another investor. It all depends on who the next owner is to be. An institutional investor can take over the entire portfolio because they base their long-term calculations on stable rental income.
For private investors, on the other hand, individual let flats may be of interest, as they wish to build up their wealth over many years. Provided the relevant legal conditions are met, larger portfolios can be divided into freehold flats and sold individually. The key is that the deal works out for both parties. The seller does not have to realise every potential for capital appreciation themselves. The buyer needs a financial outlook that aligns with their investment objectives. To this end, the purchase price and financing must be compatible with the achievable rental income and future costs. After all, a successful sale also means that the property remains a sound investment for the next owner.
Sell, as long as you don’t have to
The best sales decisions are rarely made under time pressure. If you are not under pressure to sell, you can assess offers and wait for a fair price. You can hold on to the property if the terms are not right. And they can free up capital as soon as a sale becomes more financially attractive. This involves considering a potential exit strategy right from the point of purchase, without committing to it. Markets change, as do the prospects for individual buildings. A strategy must therefore remain flexible. Selling is not an end in itself: capital that is freed up only creates an advantage if it can be put to better use.
More flats do not necessarily make for a better portfolio
For professional investors, what ultimately matters is not how many flats appear on the balance sheet. A smaller, financially stronger portfolio can achieve more than a larger one in which capital remains tied up without any convincing prospects. This is precisely why targeted sales form part of a growth strategy. Anyone who wants to hold on to every good property will eventually find that they can no longer afford the next good opportunity.
