Investor buys entire street

baby_boomer

Well nearly, the FT was going in for a tabloid headline. The investor is probably going to get 28/48 houses.

FT - Investor buys entire street

"...Managing Partners Limited, an investment adviser and fund manager, is in the process of acquiring almost an entire street of houses in Portsmouth at prices as much as 40 per cent below official asking values.The properties are held within its British Property Opportunities Fund, which now owns 18 of 48 properties in the street, with offers pending on a further 10.

The fund has paid between £89,000 and £100,000 for each of the properties, most of which had been repossessed by lenders. Two years ago they were being sold for between £180,000 and £205,000..."

So around 50% off their peak.

It does suggest that buy-to-let may have helped cause the HPC but may also, eventually, be part of its ending.

Other investment funds are out there, but holding fire until it gets really dire in 2009.

sabretoothtigger

Companies like this always stand to make a good deal when they have the power to influence an entire neighbourhood and its value

dopester

Looking at their website, I think investments such as this will cause financial loss and misery for this Cayman Island registered company. They'll be saying hello to falling capital values and lower rents.

Just as short-sighted as the company who bought HSBC's City building a year or so ago, and now want to sell it back to them at a discount of £300 million.

You can almost write the future headlines to come in 12 to 36 months. Just as short-sighted as the risk RBS took on paying near top-whack for ABN Amro, despite it being clear the financial world was undergoing a seismic change. My bet is MPL has fully under-estimated the risks involved.

Managing Partners Limited (MPL) is a highly reputable, multi-disciplined investment house that specialises in managing alternative assets classes. MPL is a market leader in the field of traded policy funds (in particular TLPs) an asset class that is renowned for its low risk, inherent guarantees and balanced growth characteristics. The board of MPL and it subsidiaries has over 70 years’ collective experience in asset and fund management.

News section.

MPL Launches Property Fund as Deep Discounts Open up in the UK Market
Managing Partners News
February 4th, 2008

http://www.managing-partners.com/aboutus.php?page=aboutus

sabretoothtigger

Short sighted is buying at the top of a boom, buying even half way to the bottom is genius in comparison

kennyboy66_2

dopester wrote: »

Looking at their website, I think investments such as this will cause financial loss and misery for this Cayman Island registered company. They'll be saying hello to falling capital values and lower rents.

Just as short-sighted as the company who bought HSBC's City building a year or so ago, and now want to sell it back to them at a discount of £300 million.

You can almost write the future headlines to come in 12 to 36 months. Just as short-sighted as the risk RBS took on paying near top-whack for ABN Amro, despite it being clear the financial world was undergoing a seismic change. My bet is MPL has fully under-estimated the risks involved.

1) but by definition they clearly have not paid "top whack" for the properties.

2) Most investors can understand that prices can go both up and down, it is only the fools who think they can either go up and up and up or down & down & down.

3) It's not excatly healthy that their are investment companies out there, still looking to compete with FTB'ers - and getting significant tax advantages to do so.

dopester

sabretoothtigger wrote: »

Short sighted is buying at the top of a boom, buying even half way to the bottom is genius in comparison

It won't be enough imo. Sure, it might look a decent deal now, with some short-term rewards for them and the people who invest in their fund, but big losses for them if I'm right on just how deep and prolonged this crash will be.

Also so focused in one area... risk after risk, lets see how much HBOS money (themselves reeling into a new dimension of horror from their huge mistakes) they are funded with to buy elsewhere.

From The Sunday Times

November 23, 2008
Profit from the buy-to-let chaos

Investors are finding big bargains as landlords are being hit by repossessions


PROPERTY FUNDS
One property fund is looking to buy up an entire street of 45 properties in Eastney, Portsmouth, many of them from distressed landlords.

The British Opportunities Fund, launched at the start of the year by boutique fund manager Managing Partners Limited (MPL), backed by HBOS, has paid between £89,000 and £100,000 for each property. The same properties were selling for between £180,000 and £205,000 two years ago.

The fund, which says it has returned 6.16% growth since launch compared with a fall of 10% in the Halifax house price index, has bought 15 of the 48 properties in Fort Cumberland Street and has offers pending on a further 10 homes.

The management expects a minimum 10% rental yield on each property. It has funded “non-structural refurbishments” and installed a caretaker to collect litter and maintain the street, which it says allows it to charge higher rents.*

The minimum investment is £50,000 — £2,500 if made via a self-invested personal pension.

Jeremy Leach, managing director of MPL, said: “The fund has been able to purchase these properties from landlords who have overstretched themselves at prices that are as much as 40% below market value.”

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5212167.ece

* Not from people who can't afford the rents. Tell it to the bank I was in yesterday where the cashier informed me they'd all been told they were being made redundant at that branch - repeat all over the country.

amcluesent

Not so smart buying a while street in England's most infamous chav town.

dopester

PROPERTY FUNDS
One property fund is looking to buy up an entire street of 45 properties in Eastney, Portsmouth, many of them from distressed landlords.

The British Opportunities Fund, launched at the start of the year by boutique fund manager Managing Partners Limited (MPL), backed by HBOS, has paid between £89,000 and £100,000 for each property. The same properties were selling for between £180,000 and £205,000 two years ago.

The fund, which says it has returned 6.16% growth since launch compared with a fall of 10% in the Halifax house price index, has bought 15 of the 48 properties in Fort Cumberland Street and has offers pending on a further 10 homes.

Is there a Fort Cumberland Street in Eastney, Portsmouth?

Closest my searches return is for a Fort Cumberland Road, Eastney, Portsmouth.

Having a look with Google maps on satellite function, and this seems to be the residential stretch of the road.



With perhaps 48 properties if you include the similar looking builds behind, and flats on the other side.

First search for any for sale returns this from Cubitt & West (date?):

PDF Details

Fort Cumberland Road, Eastney, Portsmouth
Price: £ 117,950
A three bedroom maisonette in Eastney.
Upstairs bathroom, double glazing, plus no onward chain.
Ideal first time buyer/investment opportunity.

There are others too, that are/were on offer from £97,995, except it says Fort Cumberland Road, Southsea - instead of Eastney, but the buildings are identical to the pdf offering described as Eastney.

http://www.globrix.com/property/buy/po4/fort-cumberland-road

Point being, whilst people might whoop-and-cheer at this company's 40% reduction, and tell me, dopester.. "by definition they clearly have not paid "top whack" for the properties", and how they is still "money competing with potential FTBs" to support prices and so on - it seems to me, if I'm right, the general value the company paid was not too far below the open market price.

A quick scan of rental values for the general area shows the area doesn't command particularly high rents.

A search of houseprices does show some stupid money spent in last few years for that road, for flats and terraces, and even one which sold at top money in May 2008.

http://www.houseprices.co.uk/e.php?q=Fort+Cumberland+Road&n=100

I just don't see some 2009 nadir, and this company, or individuals waiting to get in to BTL opportunities at such prices levels , getting HPI dreams-come-true for a long long time - if ever - and not when capital could be put to work for better returns elsewhere in more liquid markets.