‘Black horse’ sell-offs go at a gallop
Investment agents are getting used to new ways of working as distressed assets are worked out by banks. Buyers circling properties from two former HBOS-backed ventures, Kenmore Capital and Ian Wotherspoon’s Kilmartin property empire, have been surprised by the speed at which Lloyds Banking Group has sold them on, often before the formal bidding process has begun.
An agent close to the deals told Diary: “Once they’ve found someone they know and trust and like, they move fast.”
One prospective buyer reports that they did not even receive the property details they had requested, such was the speed at which it was sold, while another said that, in his case, due to existing relationships between bank and buyer, the agents were practically bypassed altogether.
Credit to Lloyds, perhaps: after all, the market has urged the banks to work out their portfolios swiftly.
One solution to the debt crisis – emigrate!
Leading property figures were in a philosophical mood about the task facing the new government this week.
Speaking at the BPF’s Movers & Shakers breakfast at the Dorchester on Wednesday, Credit Suisse investment banking division’s managing director, Ian Marcus, predicted a “long, laborious” process of resolving the debt crisis.
He added that he had become so gloomy about the short-term prospects for the economy that his daughter had advised him to emigrate. “She does want my house though,” he added.
Rupert Clarke, chief executive of Hermes, said it was difficult to say which party was best placed to tackle the public sector deficit as none had “stuck their neck out” on their plans.
However, he added that the Liberal Democrat policies were so “barking” it was clear they would not be a success. “Not that I’m trying to influence things,” he added.
Roman House circus
Will Roman House in the City ever be redeveloped? The 55,100 sq ft, 1970s office block has stood empty for years as ambitious redevelopment plans have come to nothing.
Back in August 2007, it was bought for £29.8m by Irish-based Orion Fund, which planned to redevelop it. The plans got nowhere and the block has since been handed to KPMG as part of a receivership sale.
More recently, an unknown hotelier was said to be in discussions with the City Corporation to convert Roman House into a hotel. However, this plan was also scuppered when the hotelier was unable to secure planning permission.
Roman House helped to trigger the renewal of the Barbican area in the mid-1950s. Property historians will be hoping for a white knight.
Hammerson and Cazenove get punchy
Property companies often have stormy relationships with the analysts who report on their financial health. As a case in point, Diary notes this week a rather telling exchange between JP Morgan Cazenove analyst Harm Meijer and Hammerson finance director Simon Melliss.
Last week, Meijer wrote a note discussing Hammerson’s interim management statement which pointed out that, with a 10% discount to net asset value, the company’s shares looked “interesting”.
Shortly afterwards, he received an e-mail from Melliss challenging his wording. It read: “Interesting??? Very Cheap!” In its most recent note, JP Morgan Cazenove responds: “Our comment: we welcome Simon’s punchiness.”
Housing targets: the buck stops with Boris
As EG went to press on Thursday, the outcome of the general election was still undecided. However, David Cameron’s party has made it clear that in the event of a Tory victory – or even a Tory-led coalition – in London at least it’ll be clearer who we can blame if housing delivery targets are not met.
At the moment, the mayor chairs the Homes and Communities Agency but has no control over its £1.1bn budget or its day-to-day running. That would change.
So what’s the underlying message? If those housebuilding targets are not met, don’t blame Dave. Blame Boris.
Grand breakfast
If you’re still wondering whether London’s property market is on the mend, then look no further than City AM‘s Bill of the Week.
This week, six property professionals celebrated clinching a deal with a night out followed by breakfast at Boy’s Brasserie. Each of them managed coffee, a full English and, of course, the obligatory three bottles of Cristal to wash it down; and all for the bargain price of £1,001.53.
The tale of the lender and the tramp
More tales have been circulating about the excesses of the property boom. And most should be filed in the folder marked: “Why on earth did we kid ourselves that it could last?”
One agent recently revealed that he waved off one of his colleagues to carry out a valuation with a warning that he should expect to meet someone who looked “more like a tramp than an investor”.
Another industry veteran recalled with incredulity how a borrower’s signature was an “X”, not his name.
And it emerges that when handed the file of a borrower with loans in excess of £50m, rather than finding a bulging wedge of loan documentation, one member of a bank workout team instead found just three sides of A4 paper.
