Property development finance

Merger creates UK’s largest property adviser

June 8th, 2011

This week saw global commercial real estate firm Jones Lang LaSalle merge with international property consultancy King Sturge, creating the UK’s largest property adviser.

Under the terms of the transaction, which is thought to have closed On Tuesday, Jones Lang will pay consideration of £197 million to King Sturge’s partners with £98 million to be paid at completion and the rest of the balance over five years.

All 43 King Sturge offices and businesses across Europe, including 24 in the UK, will become part of Jones Lang LaSalle and will operate under the new brand. Integration of the business lines and teams, as well as the full rebranding of all business activities, will commence immediately. King Sturge’s operations are expected to be ‘fully integrated with Jones Lang’s by the end of the year.

Christian Ulbrich, Jones Lang LaSalle Chief Executive Officer for EMEA, said: “The obvious strategic and cultural fit between Jones Lang LaSalle and King Sturge makes this a logical and very attractive proposition for both firms.  It gives us a scale and depth of expertise that will make our client service delivery capabilities second to none in both the UK and continental Europe.”

Richard Batten, Joint Senior Partner at King Sturge, added that this was ‘great news for all of King Sturge’s staff and clients’.

Yet whilst the augmented capabilities of the property giant may benefit both Jones Lang and its current clientele, the scale of the operation leaves other industry players fearing the emergence of a monopoly power in the market.

Stephen Johnson, New Business Director at Whiteaway Laidlaw Bank, said: “The transaction removes competition and choice from the market as these are both high end commercial property firms; clearly it makes sense for the businesses themselves and their partners, but from a lenders and brokers perspective it means one less option.”

Rob Lankey, Managing Director of Commercial Mortgages at Aldermore, added: “Further contraction of the market could be viewed as damaging from a competition point of view but this merger of two of the heavier hitters is likely to create a formidable player and I would view this as a positive move overall.”

This latest merger is part of an ongoing growth path for Jones Lang, who has expanded its global presence to 60 countries by acquiring 30 smaller brokerages since 2005. The acquisition will undoubtedly bolster the firm’s proportion of share revenue from Europe – which accounted for 25 per cent of income last year, the company said.

The transaction is also thought to be one of the fastest routes available to King Sturge for growth. According to Bloomberg, since Jones lang sold Shares in an initial public offering in 1997, it may easily raise money in the stock and debt markets to finance expansion, while King Sturge’s partnership structure makes expansion harder.

Bookmark and Share

Tags: ,
Posted in Property, Property development finance | Comments Off

Footballer’s £4.5M ‘palace’ gets ‘red card’ from residents

March 18th, 2011

A Premiership footballer has been granted planning permission for a new home, much to the dismay of his new neighbours.

Tottenham and England striker Jermain Defoe will build a customised £4.5 million “palace”, complete with its own nightclub despite fierce opposition from residents, who feel that the footballer was given preferential treatment by planning authorities.

Locals are particularly apprehensive about the plans because they live yards from the old Epping Forest.

Resident Suzanne Calder, 48, a recruitment consultancy director, told the London Evening Standard: “I’m very worried about what it might do to the value of my property.

“I couldn’t even get planning permission for a driveway. I’m gobsmacked it was granted. Talk about one rule for some and one for another.”

Nevertheless, planners have passed the scheme to demolish the neo-Georgian manor which now stands on the site in Chigwell, Essex, and build the new property – which will have a hair salon, an underground swimming pool and a giant outdoor hot tub.

According to the Standard, documents also reveal plans for a gym, games room and several five-a-side football pitches.

Neighbours fear 28-year-old Defoe’s proposals will encourage antisocial behaviour in the village, where residents include Apprentice star Alan Sugar and three-time world snooker champion Ronnie O’Sullivan.

John Evans, 55, who owns a nightclub in Shoreditch, said he was against the soccer star’s plans because he came to live in Chigwell to get away from the busy London nightlife scene.

“I wouldn’t fancy a nightclub – it’s very quiet around here,” he added. “I imagine there’s nothing we can do if his application’s been approved, but we came to Chigwell for peace and quiet.”

Papers lodged with Epping Forest council are in the name of Defoe’s mother, Sandra St Helen, 46, who is from the Caribbean island of St Lucia.

The news came 24 hours after it emerged that Defoe had put his Hertfordshire home on the market for £3.75 million. That mansion, which is in the village of Cuffley, also has a gym, plus a cinema and games room.

The Chigwell property is a significant upgrade from the Hertfordshire residence which covers just 7,000sq ft.

Despite being a teetotaller, striker Defoe, who has scored 15 goals for England, is a regular at West End nightclubs.

Masthaven offer a range of property development finance

Bookmark and Share

Tags: ,
Posted in Property development finance, Uncategorized | Comments Off

Skeletons hold up £4M development project

March 11th, 2011

Workers at a property development site in Bolton have uncovered human remains, after stumbling across a former burial site. Great Places Housing Group, the developers, said that contractors were levelling a car park on the housing development in Deansgate, when they discovered the human remains.

These findings come only two weeks after a skull and coffin were unearthed on the same site. The site, which is set to hold the £4 million 40-apartment block, is the first stage in the construction of 6,000 new homes in the borough over the next 12 years.

A worker, who asked not to be named, told The Bolton News: “We all feel a bit uneasy about work continuing around it. Something should be done about them before we carry on.”

Matthew Harrison, deputy Chief Executive of Great Places Housing Group, told the Manchester Evening News: “Work was halted immediately and the police were called. Police took the remains to a local funeral company.

“Under police direction, and in liaison with the diocese, the bones will be returned to the ground in a casket, in a Christian service performed by a minister. The excavations will then be filled in.”

The burial ground of the former St Paul’s Church is located next to the site.

Mr Harrison continued: “The car park dates back to before Great Places’ acquisition. When Great Places bought the church, we understood that no part of the site had been used for burial. Since the discovery, we have been told that the remains probably date from before the church was built.

“We are sorry that these remains have inadvertently disturbed. Our records do not show this part of the grounds as having been used for burial. We are acting in accordance with the police and the diocese to respectfully return the remains to the ground.”

The new housing development is expecting its first tenants later on in the year. However, with the recent discoveries and the unwillingness of the workers to continue construction whilst the graves remain visible, it’s possible that the time schedule will be disrupted.

Source: www.bridgingandcommercial.co.uk

Bookmark and Share

Tags:
Posted in Property development finance | Comments Off

Manchester property giant snatches a little more of the market

February 11th, 2011

A Manchester-based commercial property company has announced that it increased its value to £948M in 2010.

In its last financial year, Bruntwood increased its new lettings by 28 per cent and its overall turnover by 3 per cent. The company manages over 100 office buildings across Manchester, Liverpool, Birmingham and Leeds, and despite the market conditions over the last few years it has managed to increase its dominance and power in the industry.

Chief Executive of Bruntwood, Chris Oglesby, said: “Despite a tough market and stiff competition, we have delivered a very impressive increase in new lettings with a record year in Greater Manchester and continued success in our other three cities, Birmingham, Leeds and Liverpool, where we have attracted significant new occupiers. I am proud of the way that the team at Bruntwood have once again responded in delivering another very good set of results.”

But this ‘record year’ in Manchester comes as little surprise to those working and living alongside Bruntwood. Eugene Esterkin, MD of Manchester-based Affirmative Finance, noted that Bruntwood’s model, as well as Manchester’s strength in comparison to the rest of the UK (excluding London), had both contributed to the positive figures.

“The company is extremely well run and uses an effective business model. It is flexible, in that it accommodates both short and long-term lenders and it is also imposes less restrictions on its tenants than over letting agencies.”

He added: “Manchester is often seen as being the capital of the North of England by foreign investors and, in comparison to other big cities, has done well throughout the recession. It does not surprise me that the combination of Bruntwood’s clever model and Manchester’s strength would yield these results.”

Yet despite such positive increases in its value and its number of new lettings, Bruntwood confirmed that its net profit had actually dropped slightly to £11.1 million.

This fall though, may be due to the fact that the company also made a number of acquisitions in 2010, purchasing new properties in Leeds, Manchester and Birmingham.

Chris Oglesby said: “Although the market appears to be awash with bargains at the moment, on closer scrutiny, there is very little stock offering value of any quality. Despite this, we were able to dig out three high quality buildings which we believe offer exceptional value across the cycle.

“We are pleased to be acquiring properties again and are keen to extend our customer focused business model across the major UK regional cities. We work hard to be seen as our customers’ property partner, rather than their landlord and focus all our efforts on creating the right environments for them to succeed. Put simply, we know that our success and growth is inextricably linked to theirs.”

For all you property development finance contact www.masthaven.co.uk

Bookmark and Share

Tags:
Posted in Property development finance | Comments Off

Flat-pack housing becomes the new bricks and mortar for lenders

February 8th, 2011

The house is flat-packed and boxed, but is it sturdy enough to solve the UK’s housing crisis?

Non-traditional housing options, such as flat pack Ikea-esque constructions, are certainly not a new addition to the property market. The first Scandinavian-style timber-framed home became available to consumers back in 2007, and since then many companies, including Tesco, have hopped on the flat-pack home bandwagon. A recent report from the Royal Institute of Chartered Surveyors (RICS) has suggested that houses constructed from these sustainable materials could be the solution to the UK’s property crisis.

There is certainly a demand for an affordable alternative to bricks and mortar, especially amongst first-time buyers. Recently, an Oxfordshire family demolished their 78-year-old home and replaced it with a four-bedroomed flat-pack construction. The property shell cost £126,000 to purchase, so a considerably cheaper option to re-building their home by traditional means. Not only does this option, being constructed from recycled materials address environmental issues, it’s also exceptionally sustainable. Made from German hardwood, the home is expected to exceed a life span of 100 years.

Steve Turner, a spokesperson for Home Builders Federation (HBF), stressed the need for the housing shortage to be addressed, commenting: “There is an acute housing crisis in this country – we estimate a shortfall of a million homes. The Government’s own household formation projections show we should be building around 230,000 homes a year. In 2009 we missed that by 100,000 and built less than any year since 1923.

“Indeed you have to go back many years to find a year when we got close to building the required number of homes. So any initiatives that help increase supply are very welcome.”

their launch, the flat-pack homes were available at around £150,000 providing an inexpensive alternative. Marketed as affordable, easy to put together and fast to build, this development was anticipated to alleviate the housing market and resolve the problem of first time buyers being shunned from joining the property ladder due to extortionate house prices. According to Eugene Esterkin, Managing Director at Affirmative Finance LTD: “Flat-pack is well established in certain countries and although not particularly favoured in the UK, it does present an interesting and innovative option for the UK market.”

The success of the timber structure option will, to a certain extent, be dependant on the willingness of mortgage lenders to provide financial aid. Regardless of the healthy market demand, if mortgages are unattainable these types of properties and their feasibility as a market solution will be limited. Steve Turner added:“A lack of mortgage availability is the main constraint on supply. Hard pressed first-time buyers need assistance, and lenders have to return to lending on realistic terms. Recent months has seen planning permissions granted drop, threatening a worsening of the crisis in the future. The Government must also deliver on its promise to reduce regulation.”

“House building sites can simply no longer support all the costs levied on them by central and local Government. So whilst self-build homes may not be the mainstream housing supply solution, removing the barriers to self-building is.”

However, according to Eugene Esterkin, There is no reason why in principle Affirmative would not lend on flat-packs and indeed we are always happy to lend where there is an innovative and creative proposal which makes sense. The key factor would be the exit strategy since clearly the borrower would be looking for long term finance to replace the short term product which we offer.”

“We do get occasional requests (for loans on flat pack housing) and have in the past completed transactions for this and other cheap and fast housing solutions.”

Flat pack housing seems like a suitable option but individuals and developers could be faced with difficulties when trying to purchase land and obtain planning permission. The need for extensive building regulation control as ‘cowboy entrants’ move into the growing alternative housing market must also be considered. Eugene Esterkin added:“Provided the suppliers are reliable traders and installers then there is a great opportunity to use the new technology available.”

From a lenders perspective a loan will only be issued if there is enough security against the lend.

James Moore, BDM at Regentsmead Ltd, said:“The property being built must be suitable for mortgage lenders’ security. It must also conform for health & safety reasons, and for our warrantee providers like NHBC and have been approved by Building Control. We are the first link in this chain and are happy to lend so long as this type of construction ticks all the boxes for us to receive our money back, be it by sale or refinance especially in this economic climate.”

“We must remember not so long ago the Labour Government stated 25,000 new homes needed to be built every year for the next 20 years or so and that we are no where near achieving this figure in the current climate. So if this new housing is seen as suitable for all parties who are involved in the development to personal mortgage process and are in agreement to the security being ‘of sound investment’ we would be pleased to be of assistance.”

If mortgage providers are willing to accommodate the financial requirements involved in developing this alternative housing option, it’s possible that the UK property market stand-still could be relieved, paving the way for future stability.

Bridging loans for property development

Bookmark and Share

Tags:
Posted in Property development finance | Comments Off

Six solicitors charged for role in £50M mortgage fraud

January 28th, 2011

Six solicitors have been charged in relation to an alleged fraud that is set to be the UK’s largest ever mortgage scam.

Three lawyers from Patwa Solicitors, Birmingham, as well as three solicitors from various other companies pleaded not guilty when they appeared at Southwark Crown Court.

They have denied any involvement in the case of the £50 million commercial mortgage fraud. A chartered surveyor and former Dunlop Haywards head of valuations, Ian McGarry, and Birmingham property developer Saghir Afzal pleaded guilty for their part in the case.

It was revealed that six properties purchased between 2004 and 2006 for less than £6 million were used as security by the accused for loans of £49.28 million.

The solicitors allegedly used McGarry’s hugely over-inflated valuation reports to con banks and building societies into what Andrew Baillie estimated to be the equivalent of an 866 per cent mortgage.

Jonathon Newman, Brightstone Law LLP, said: “Lenders rely on the valuation advice and the integrity of the valuer when evaluating an application.”

David Freedman of Aubrey David LLP, added that any determined fraudster would require the services of an ‘unscrupulous professional’.

In this case, it seems that many unscrupulous professionals were involved in creating a complex web of corruption that has taken several years to uncover.

The first query levelled against any of the loans was made in as early as 2006 by The Cheshire Building Society. The Serious Fraud Office (SFO) began investigating soon after, yet the case is still ongoing.

David Freeman said: “The resources available to the police in fraud cases are limited. I am not surprised that it takes time to get to the bottom of a fraud case.”

Jonathon Newman explained that another difficulty with mortgage fraud cases is that it often takes a long time for the ultimate lender to realise that there is a problem, because the property may be re-mortgaged several times. There may then be both a civil and a criminal case involved.

The case is currently still ongoing and it is anticipated that it will take 12 weeks before a verdict is reached. By the end of this period Mcgarry and Afzal will be sentenced.

The six solicitors have been named as Hardeep Sodhi, 34, Fatema Patwa, 48, Mark Knight, 46, Laurence Fennigan, 49, Simon Lawrence, 39, and Kamram Malik, 31.

By Katie-Jill Rowland

Bookmark and Share

Tags:
Posted in Fraud, Mortgage, Property development finance | Comments Off

Property hungry couple owe £670M

January 21st, 2011

A lawyer from Dublin has ended up owing £670 million to banks all over the world having purchased a portfolio of high-end properties using readily available credit during the property market’s boom.

The extent of Brian O’Donnell’s debts have been laid bare because the Bank of Ireland has taken him to court in an attempt to force him to sell one of his prime London assets – Sanctuary Buildings, an office block just a few metres from the Houses of Parliament – as the bank tries to recover the £58 million he owes them.

During the bubble, O’Donnell audaciously developed an international property portfolio that includes two buildings in London’s Canary Wharf – 17 Columbus Yard, purchased for £125 million, and 15 Westferry Circus, purchased for £140 million – as well as Stockholm’s largest office block and an office building on Pennsylvania Avenue, Washington D.C., situated just a few hundred metres from the White House.

O’Donnells’ rise in the property sector mirrors that of a number of other investors who caught the property bug when credit was cheap and capital yields – profit on buildings – meant that millions could potentially be made in a matter of weeks. His case is the latest in a series of court actions being instigated against property developers now bearing the brunt of the financial collapse.

Masthaven: for property development loans

Bookmark and Share

Posted in Bridging Finance, Property development finance | Comments Off

Property millionaires soar in London but dwindle in Wales

January 7th, 2011

The number of property millionaires in Britain increased by 6 percent during 2010, according to research by property website Zoopla.co.uk.

One in every 118 homes is now worth £1 million or more, whereas in 2007 – when the property market was supposedly at its peak – it was just one in 97.

But while such figures might suggest that the economy is on the road to recovery, the research also demonstrates the uneven nature of this revival: while the number of property millionaires in London and the South East increased by 11 per cent and 12 per cent respectively, Scotland saw its property millionaire ranks fall by 14 per cent.

Even more shockingly, the number of Welsh property millionaires plunged by 49 per cent.

Unsurprisingly, the capital is home to nine of the top ten areas in Britain with the highest proportion of homes that are valued at over £1 million, led by Kensington (W8) where 52 per cent of all homes are worth more than £1 million.

Commenting on the figures, Nick Leeming of  Zoopla.co.uk said: “The North versus South wealth divide is now starker than ever. Property values have recovered well at the top end of the property market but the rest of the market and particularly the North have seen a steep decline in high-end property values. The prime market in the South has been impacted far less by the mortgage squeeze as a result of the inflow of foreign money and the strength in the City keeping demand for million pound pads at peak levels.”

Self employed? need a bridging loan?

Bookmark and Share

Tags: ,
Posted in Property, Property development finance | Comments Off

Estate agent jailed after conning £20m from victims

December 13th, 2010

A property fraudster, who conned victims out of £20 million after setting up as an estate agent and managing to avoid police for 10 years, has finally been jailed.

Dixit Shah, 49, set up over 200 companies and by the time he was arrested had 36 buy-to-let properties. He acquired the string of properties having submitted false mortgage applications, lying about incomes and stealing other people’s identities.Shah, who used the money to fund a career in Bollywood, has now been jailed for five and a half years and at least one of accomplices, Gaurav Mathur, is still on the run.

Shah set up the estate agency, Hilton Properties, in north London, which was used to provide rental information required by lenders. The fraudster was able to set up an estate agent despite being wanted by the police and having previously been struck-off as a solicitor.

Lenders that were conned include Kensington Mortgages, which lent £238,000 in March 2007 on a property in south-east London. The property was almost £7,000 in arrears at the end of October last year.

In this application, accomplice Mathur, 38, claimed to be self-employed and have an income of between £93,000 and £95,000.
The conman claimed victims across the UK and Asia, with firms of solicitors, high street banks and foreign students all being targeted – but his links to the criminal underworld meant many were afraid to speak out against him.

However, following a six-month investigation by the City of London Police, Shah was arrested outside a Harrow gym, after two patrol officers spotted a Jaguar linked to him nearby.

Det Supt Bob Wishart, from the City of London Police Economic Crime Directorate, said: “Over the last ten years, Shah has left a trail of destruction stretching from here to India, with pension fund holders, high street banks, solicitors and foreign students all suffering at his hands.

“Unfortunately for him his criminal successes were not mirrored by his forays into the world of Bollywood, where his delusion led him to lose millions.

“By bringing Shah to justice we have curtailed his career in films, and much more importantly removed a ruthless and calculated fraudster from the streets.”
Shah’s unscrupulous business practices first came to light in 1999 when the Solicitors’ Regulatory Authority (SRA) uncovered a £13 million deficit in the joint account of a group of solicitors’ firms that he had set up.

Shah had put himself in charge of the collective pension funds while working from home and by the time his partners realised the accounts had been emptied and the financial records deleted, he had fled to India.
His crime spree continued, from 2000 to 2006, as he ran major credit card frauds across India, Pakistan and Dubai and set up a bogus company offering students the chance to travel to the UK to learn English.

When back in London he started stealing the identities of British and Indian nationals, some of which he used to apply for fraudulent mortgages from high street banks.

His portfolio of properties, worth £9 million, included new-build flats and a ten-bedroom mansion in Watford.

Bookmark and Share

Tags:
Posted in Property development finance | Comments Off

On the market for £400m – Inside the most expensive row of houses in the world

December 3rd, 2010

There are prime properties, and then there are sprawling, historic, super prime properties based in Regent’s Park - which may explain why a row of terraced houses there has gone on the market for a collective price of £400 million.

Cornwall Terrace Mews is made up of eight double-fronted mansions, which are each valued at between £29 million and £60 million, and even the official press release concedes that they are targeted at the ‘super-rich’.

The address has been called the most prestigious in London by excited luxury property bloggers, who enthuse that this will most likely be the only property of its kind to ever come on the market.

Formerly leased to British Land as its headquarters, it was snapped up by property developer Oakmayne Bespoke just over two years ago when the lease ran out.

The luxury residences belonged to the British nobility for 150 years, and are still part of The Crown Estate, meaning interior designers hired by Oakmayne were under strict supervision from English Heritage and The Estate whilst giving the Grade I listed properties ‘a tasteful makeover’.

This makeover includes a monochrome colour scheme, glass accents and artwork on the walls by Picasso, Serra, Francis Bacon and Damian Hirst, as well as state-of-the technology – such as ‘multi-room iPad-controllable audiovisual and lighting systems’ and a silent, custom-designed lift.

Overlooking the rowing lake at Regent’s Park, every property has five to seven bedrooms – which are each the size of a typical London flat, according to the brochure – and an accompanying two-bedroom mews house, ‘Bentley-sized’ garage, spa and gym.

Whereas conventionally built houses take around 16 weeks to build, the eight mansions have taken a team of over 250 craftsmen two and a half years to build – with each house gobbling up 83,000 man-hours to create.

If you’re wondering what took them so long, laying the ‘hand crafted marble floors and finishes’, using ‘nine different types of the finest Italian marble’ doesn’t sound like an easy task…

A multi-million excavation project, employing a team of men to ‘dig by hand’ to a depth of up to two metres below the original basement floor level in order to create lower ground floors for the spa, gym, home cinema and staff quarters also took 12 months.

The largest of the eight properties, Boswall House, which stands at 14,409 square feet and comes complete with its own ballroom and swimming pool complex, is set to be sold next year. Two more properties are up for sale for £29 million and £39 million, whilst the rest will be put on the market later next year.

The mansions can be purchased without contents, or fully dressed, although buyers requiring a fully interior designed property have been advised to allow for a separate budget of £1.5 million to £2 million.

What’s more, prospective buyers could have to cough up around £2.5 million in stamp duty, but should be reassured that the City of Westminster, where the mansions are situated, has the capital’s second lowest council tax rate.

Masthaven property development finance

Bookmark and Share

Posted in Property development finance | Comments Off

« Older Entries
Newer Entries »