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Dipped my toe in last week, timing hopefully is good for a steady rise from here with news like this
yeah very positive RNS, should sail past 60p soon. INL seriously undervalued before the downturn, let alone now. Looking forward to next 12 months here.
B3Living is Broxbourne Housing Association's new name. So alot of the money that Inland are contracted to receive is essentially government-backed money. And there's £23,250,000 in land sales plus they've locked £4.5mill in residential units sales too. The HA contractor-arm has also taken it's order book to over £100million now (and I assume that profit is simply a function of turnover on that side of things - perhaps 9 to 11% of the build cost).
The Staines deal looks a good one - £6.6mill plus a cut of the uplift in the anticipated profits post-planning (when both parties flip the site no doubt!).
And the sentence saying they are well on the way on other land deals too - looks like the land deals that were stalled pre-corona are back on track. Possibly with new parties (I don't know - just that the land market is rocking at the moment - alot of activity, alot of people running around trying to buy sites, alot of sites available (but not seeing land values fall at all if I'm honest). I remain a long term holder of these shares - and it would be nice to see the share price hit 60p+ and stay there.....!
Thanks for looking it up Demos - i've not had time to do the research into it (wife has a new job - me working at home and 3 nippers).....It makes sense - the fact that Bewley and INL have done it this way - effectively they've insisted on the deal completing (so the price is locked in, and they are able to tell the market that the income is registered) but on the flip side if gives Bewley the chance to get a spade in the ground and helps with their own internal ROCE (or ROACE) figures in that they aren't carrying the cost of the total amount they are paying, upfront. so total figure agreed is (for arguments sake) £25 mill. A nominal amount is paid on exchange, with completion a month thereafter (and perhaps £10% of the total paid at that point. then £13.5mill paid in September and perhaps the next £12mill or what have you paid a year later. (and more important for bewley they are a year closer to realising some cash in the form of completed house sales.) everyone's a winner.
Hadn't realised that only 2/3 of the sale to Bewley is payable by September, so it looks like the £13.5m (that will go towards loan repayment in September) is at most only 2/3 of the proceeds .... so they got at least £20.25m for the sale which implies £215,000 per plot which seems a lot better. Not quite the £250k you wanted but closer !
That's only £145,000 per plot Demos - I thought they'd get more tbh. But perhaps there are abnormal costs associated (remediation or something). I thought the number would be nearer £250k-£300k per plot. I think Corona has really focused their minds - and paying that £150mill is a priority. :)
That's only £145,000 plot Demos - I thought they'd get more tbh. But perhaps there are abnormal costs associated (remediation or something). I thought the number would be nearer £250k-£300k per plot. I think Corona has really focused their minds - and paying that £150mill is a priority. :)
Oi Oi ... looks like they got upwards of £13.5m from Bewley and are progressing land sales - which has to be good news. I guess the Directors know what they're up to in this business! Taken from the 30 June RNS ... "We are also now at an advanced stage on a number of land sales which are anticipated to exchange or complete in July 2020" and "£13.5m will be repaid in September 2020 from the contracted sale that was announced by the Group on 16 June 2020. The balance of the facilities of £41.5m will either be repaid from planned land sales over the next five months in the order of £37m (some of which are already agreed and are with solicitors) .... ".
Ok wouldn't let me post the links but you can find the details on Inland's webpage and the video on Inland's YouTube account.
Only 1 house remaining on Farriers Wood development https://inlandhomes.co.uk/developments/farriers-wood/availability-and-prices
Inland's YouTube shows a video of the house https://www.youtube.com/watch?v=Wr_5ms4rkXE
Well, as with all these things, situations can sometimes affect both parties - developers think they're suddenly paying too much but sellers needing the cash (any cash!) so sometimes there's an opportunity to renegotiate the terms but yes - other times developers realise that they are 'long term' holders of that land (to see any profit!) rather than turning it for a quick return. I forgot to mention brexit (which has an effect on both parties sometimes - it's not just a one-way issue for developers) and I htink corona has had an effect on everyone - people realise they need to seize the day perhaps or capture that profit and move on or not hold out til the pips are squeaking but to realise some profit rather than the extra last tenth. Or they are holding an asset that has suddenly become toxic (secondary office space) or where tenants are going bust left right and centre and their bank isn't being as lenient as the market would suggest. Buying land, doing deals - it's not just a one way street where the developer has a need and therefore the price reflects that need. We don't know if INL pulled the contracts (could have happened, using corona as an excuse) for example. they might have felt that there was a more appropriate, higher, value in them, or the buyer(s) were dragging their heels. There's always two sides to the story - it's not just the buyer dictating terms, at their pace. I doubt that was the case here but nevertheless. Bearing in mind deals take ages to do (and if they don't, what have you missed, is always my mantra!) ; there's a hell of alot of time and money invested in them prior to agreeing terms. But anyway - lets see what happens going forward.
Having said that do agree that it does mean landowners are less ambitious on prices on fresh stock and deals to be done
I was thinking more of work in progress where deals were struck sometime ago with higher end values in mind
Saveloy
Should imagine the development land market has come to a shuddering halt. Panic setting in on all those who have signed up deals conditional on planning desperately looking through the small print to see if there is any escape
The problem is all those potential Inland Home buyers looking to escape to the country from inner London stymied by the fact that their properties are difficult to shift
As you point out a whole squadron just under the £600k threshold . The problem is the enhanced deposit was only available to newbuild and those flats now secondhand
Akin to driving a new car out of the showroom is immedaitely shredded value .How do they make up a shortfall ?
In leafy Bucks HT Buyers still have to find 75 % where mortgage offers are likely to tighten
Saveloy sounds to me U&C tick all your boxes Nobody more connected than Butler & Hurgill Right out of the top drawer especially with the magic circle agents acting for major landowners where they can talk themselves into options
It's not a definitive point of view Sain - just trying to add to the argument/knowledge/give another side to things that's all. The land market is rocking (you never really hear about it because most people don't understand it, have no knowledge of it and are concerned with house prices). But it's rocking - there are deals being done , lots of activity. We've got a stable market, house price data is showing a drop (which land owners read), developers have confidence in the long term future of the UK/London, planning departments are under pressure from the Govt, there's an emphasis on build, build, build, we might even see changes to stamp duty in the budget. I think INL will get those sites away (the aborted ones) within their timeframes stated and I also think that the companies that pulled out of the deal will regret their decision(s). That's my take on it, using my knowledge of what I'm seeing in the land market right now. I don't deal with INL directly or have any internal knowledge of them as such.
Fair enough I accept what you say
With the main protagonists likely to keep their hands in the pocket on site sales I guess partly mitigated by private developers by Bewlay maybe bringing on board a deep pocketed investor with say £50m to bankroll some developments
might suit
Likely to be under more pressure to reduce borrowings
Completions arriving when the market becomes a little more settled
I've met the son on a night out with a west end agent. (I'm in property development - specifically buying land for large developers). He seemed very assured, very measured in what he was saying. He's got the watch etc etc but so do loads and loads of people in property - he really seemed to know his stuff. And he knows a hell of a lot of people - which counts for a lot in this game - it's all about the angle(s) when buying and it's all about whom you know too. Whether he's leveraged that from the association with his dad I don't know but if he has - good luck to him. Opening doors, meeting people, keeping yourself in people's minds - it's all part of the job. Buying land is so hard - you've got to leverage every angle you can. I'm in Inland for the long long term (as this stage). On the property front - I think the 'get me out of here' overrides the issue with waiting times and supply. They'll take the hit - bearing in mind alot of them are running with little to no mortgage anyway. That's the thing about £1mill flats -Help to buy is capped at £600,000 in London (less in the regions). That's why you'll barely see any 2 bed units go for £625,000 - they'll get knocked down to £600k (of £599k) or they'll be £700k+ . and once you're up into that level - alot of it is cash buyers/no mortgage buyers believe it or not. V hard to sell alot of those per month but that's the game you play if you're just stuck with UK buyers (the foreign junket/marketing pre-buy-to-let crackdown was huge and so important back in the day - get 30-40% of your units away abroad before you've even put a spade in the ground - bearing in mind their contracts out there are different to the ones here -in that they are an unconditional purchase with stage payments - contracts that you could take to the bank and borrow against.....to fund your build perhaps). It's why there's such demand for zones 4/3/outer 2 now - you're almost guaranteed to ensure all your units qualify for help to buy. £600k is a big number. People forget that - they concentrate on 'first time buyer' and then £250k or something. Anything to get people out of their buying margin/affordability threshold and upwards - that's why I think the govt wont be able to afford to stop buy to let anytime soon, despite what they've said so far....
There was a racehorse called O I Oyston , owned by the infamous Blackpool estate agent Owen Oyston who rolled out a net work of branches in the North West
I agree 'there must be a better life than this'. However with 30 week+ average listing times and a huge supply shifting that £1m flat in Battersea bought 5 years ago you are going to be looking at a big a haircut to achieve that dream
Wicks certainly knows how to play the game. Guess this time around the block as his swansong wasn't looking to sell out before the music stopped but create a family dynasty
Son of Wicks , Really don't know much about him except little experience outside the company which I would view negatively which is perhaps very unfair . Can't quite recall what profile but he fronted it with a picture of himself at the controls of a helicopter Certainly someone who likes to play with the toys
Watching but with the market seemingly turning against housebuilders at the moment feeling a little jittery
Nothing to do with Blackpool sadly Sain! Or sausages. :) Perhaps not Tower Hamlets but look at the myriad apartments at Battersea/9 elms for example. Or Fulham, Putney, Wandsworth - loads of units at the £1m level (and above) with occupants perhaps thinking 'there must be a better life than this'. On the help to buy front - I think that market was created/assisted through the stamp duty effects and taxation changes to dissuade buy-to-let investors. Wicks (at INL) - both son and father, know what they're about - canny lot. It's why I've sold out of energiser - wicks leaving leaves me uninterested in engi (might be a really bad decision that but hey ho).
Oi Oi Oyston !
Saveloys &Blackpool?
Yes agree with you HTB is here to stay and certainly "demand " for houses in Inland' s leafy acres
The problem is those who bought 2 bed newbuild flats in Tower Hamlets just under £600k with 5% deposits a few years back off plan could only access the enhanced deposit no earlier than 6 months before completion .In competiton with Investors and speculators were able to beat them to the prize
Certainly some of those flats underwater and in negative equity, So dreams of moving to Beaconsfield shattered
Sure that is only a small sector that's why its difficult knowing which way to jump .Certainly private developers like Bewlay who will put their hands in their pocket even if the corporates have shut up shop
Decisons .decsions !
Sorry - there's no edit function and pressed 'post' before doing so.
I disagree on Help to Buy - I feel that the govt don't have a choice but to renew it indefinitely - they've created a structural issue (for the economy) if they remove it as it'll cause a cliff edge, even if they taper it. I think it's here to stay tbh. Don't forget that in the shires, the way deals work can be slightly different to London. I'm talking about the large, 200+ sites here. Often they are on the edge of villages/towns, where planning permission could take up to 10 years (look at the one they are promoting near Milton common for example - they're going for 6,500 units there). the deals are usually structured so that there's an incentive, once planning has been given (because Redrow will fronted the enormous costs of capturing a planning permission - at their risk of course, there's no guarantee), the developer usually pays 70-85% of the open market value of the site (the OMV of the site taking into account a 20% profit for the developer of course). they can then either build it out or flip it (as there's the margin to do so). That type of deal rarely happens in London, in my experience. I think Corona has played into Inland's hands. Imagine being stuck in a 2 bed apartment, on the 4th floor, that you've paid £1.2million for and you're having to do zoom calls in the hallway because your wife is working in the lounge and the kids are in the main bedroom. You start dreaming of a garden and maybe a bit of space around you and then you look at houses in that price region, maybe think about adding this year's bonus too (you've been flat out through corona) and with about 60 minutes commuting into London and oh, whats that? Beaconsfield? 4 bed house with a really nice garden and the cricket and the village feel and look, it's amazing for commuting....Oh yes! Ring round the agents in the home counties - anecdotal evidence suggests that they are absolutely inundated.....Bewley have bought precisely because they feel the market is coming to them too (94 of the same type of homes? must be mad unless they've done some research).
True .London not geared to land banking although Redrow have had plenty of opportunity to get accustomed to its idiosyncracies . With many London estate agency branches showing listing times of 40 weeks+from cradle to grave ,instructions piling up at the door,something has to give
Mix in those who utilised London enhanced Help to Buyers being recycled where those 5% deposits have evaporated a very bumpy ride ahead More of a statement by Redrow
The chill winds fanning out to the fields that Inland farm
Sain - I think Redrow have decided to scale back their London Ops simply because they know how to build regional stuff more efficiently - the colindale gardens site/development is a massive regen scheme (2,900 units) and therefore is more 'potato punching' than bespoke flatted schemes that alot of London dictates. Build cost, design, unit types - each site in London is bespoke. But in the regions (forgive me here for sweeping statements) house design is fairly standard and therefore site costs, build costs, design costs etc are far easier to control/known entities and Redrow's buying powers come into play. There are huge profits to potentially glean from London but it's it's own market - you need a completely different skill set to do well in London than the rest of the uk - (I'm talking sites - it's not meant to sound prejudicial or anything.)
Update flags up they were heavily reliant on those land sales for revenue then and no doubt reliant on resurrecting some of those to eat into that debt bill of £150m which I guess they have been under pressure to reduce
Fair play to Wicks moving quickly to address that with a capital raise and cancelling the dividend
The recent sale of 94 plots they state was above that expected in March although that could have included more plots . Discussions continuing and fair to say that any future land sales are unlikely to happen without price haircuts
". During the twelve-week period from 1 April 2020, 52 gross reservations and 6 cancellations resulting in 46 net reservations achieved from five active outlets "
That seems pretty respectable and hopefully there wont be too many more cancellations but suspect those whose futures looking uncertain are keeping options open
Redrow announced today scaling back all London operations except Colindale
Difficult one?