Landal Greenparks lodge investment

Bunnymahoney

I wondered if anyone had any experience Landal Greenparks lodge investments and what your thoughts are?

I have read the old thread on Dream Lodge Group (DLG), and I can see the comparisons, but I think there are also some key differences. So this is the deal on the lodge I could afford:

·       Invest £104,950 in a lodge in a new development in Scotland.

·       Guaranteed income of £8,396 per annum, paid quarterly (including all mgt. fees, so that is 8% NET yield) = total £41,980 over 5 years

·       Compulsory buy-back after 5 years, with a guaranteed price of £104,950 (purchase price) plus 10% uplift = £115,445

·       Total return on investment over 5 years = 50% (£52K return overall)

So, looking too good to be true. Got the following answers to my questions:

·       This is a freehold purchase with compulsory buy-back after 5 years, not a leasehold agreement. The lets are fully managed, maintained etc by the management company and their will be no additional payments to them

·       Mgt. company is Landal Greenparks, who have an annual revenue of £1.5billion and a 64-year track record, and have signed a 25-year management agreement with Belvedere PLC. They are part of Awaze & Hoseasons, also multi-£bn companies

·       They told me they are regulated by the FCA

·       When asked what was in this for the seller and why don't they fund it via business loan/investment, they said this is how all their other parks have been financed and it is cheaper than a business loan of what would run into hundreds of millions

So, at face value this covers some of the criticisms of the DLG ‘investment’ as the income and buy back value is guaranteed. I asked if all would be contractually guaranteed, to which the answer was ‘yes’. I asked for an example contract to review, but this is not possible without first paying a (refundable) deposit of £1K.

The risks I guess are that I can’t get my money out, should I need it, for 5 years. If they did go bust, I’m guessing the lodge wouldn’t actually be worth what I’d invested in it, despite the fact that they are guaranteeing 10% uplift at buy-back. Finally, the actual contract may not be so quite so straightforward as the deal outlined above.

Already taken on board a lot of the comments from the DLG thread, but wondered if the investment terms and the companies involved here make this less risky? Or is this just more of the same dressed slightly differently? Any thoughts would be greatly appreciated...am I mad considering this? 

AnotherJoe

How desperate are you to lose money?

Really desperate? Not too bothered? Don't want to?

If you are the first category, go for it, the middle, consider, the last one, buy a bargepole instead.

coyrls

Bunnymahoney said:

So, looking too good to be true.

Do you need to know anything else?

ColdIron

Guaranteed? Who is the guarantor?

Easy enough I suppose to guarantee 8% by returning some of your own money, for a couple of years anyway

HappyHarry

Bunnymahoney said:

Already taken on board a lot of the comments from the DLG thread, but wondered if the investment terms and the companies involved here make this less risky? Or is this just more of the same dressed slightly differently? Any thoughts would be greatly appreciated...am I mad considering this? 

A few questions for you:

Who, exactly, are the companies involved? A quick search on Companies House shows;

(i) Hoseasons Cottages Limited previously known as Landal Greenparks UK - A dormant company being struck off the register
(ii) Landal Belvedere Ltd - Incorporated June 2020 with no accounts posted yet
(iii) Landal Belvedere Developments Ltd - Incorporated May 2020 with no accounts posted yet
(iii) Landal Greenparks (UK) Ltd - Incorporated November 2020 with no accounts posted yet
(iv) Hoseasons Holidays Abroad Limited previously known as Awaze - Dissolved in December 2019
(v) Awaze Limited who now own Hoseasons and made a 33m euro loss in their last accounts dated December 2019. This company has assets of approx. 310m euros, and is somewhat short of the £1.5b revenue you have quoted.

Or is it a different company entirely, whose details and financial strength might be available to inspection?

What is their FCA registration number - have you looked at the FCA register?

Who is guaranteeing your investment and the returns?

Just to be clear, they claim that paying you a 50% return on your investment over 5 years is cheaper than other forms of finance for them? If they can't borrow from a major financial institution at a lower rate than that, then you need to ask yourself why.

moneysavinghero

I asked for an example contract to review, but this is not possible without first paying a (refundable) deposit of £1K.

So clearly there is lots of smallprint in the contract that will mean you possibly wont get the annual income and you probably wont get 110% of the capital back after 5 years.

Bunnymahoney

Thanks all for taking the time to comment. A few responses: 

ColdIron said:

Easy enough I suppose to guarantee 8% by returning some of your own money, for a couple of years anyway

Ha. This comment may have just knocked all the sense into me that I needed. Thanks! With regards to the guarantor I assume Landal Greenparks, but until I've seen the contract I don't know. 

@HappyHarry my understanding is: 
Landal Greenparks is in partnership with Belvedere PLC, which I understand is a Dutch company (Landal that is) looking to invest in a UK park, so I guess they would have to set up a UK entity for that. The truth is I don't know much more than that this stage, but certainly would need to know a lot more about the actual contracting entity before taking further - something I'm unlikely to do now. Thanks for looking up those entities and sharing the info you found. 

This is the link they gave me for the FCA - https://register.fca.org.uk/s/firm?id=001b000000MfR2sAAF (if I'm allowed to post links. It is actually in the name of Awaze who they say they are part of). 

@moneysavinghero well this is my concern. I asked a clear question about the guarantees being contractually backed and he seemed pretty confident it would satisfy my solicitor. Having considered some of the points raised, I seriously doubt that. 

Bunnymahoney

HappyHarry said:

Just to be clear, they claim that paying you a 50% return on your investment over 5 years is cheaper than other forms of finance for them? If they can't borrow from a major financial institution at a lower rate than that, then you need to ask yourself why.

Yes, this is what they said. I've now had a word with myself, thanks!!!

HappyHarry

Bunnymahoney said:

Thanks all for taking the time to comment. A few responses: 

ColdIron said:

Easy enough I suppose to guarantee 8% by returning some of your own money, for a couple of years anyway

Ha. This comment may have just knocked all the sense into me that I needed. Thanks! With regards to the guarantor I assume Landal Greenparks, but until I've seen the contract I don't know. 

@HappyHarry my understanding is: 
Landal Greenparks is in partnership with Belvedere PLC, which I understand is a Dutch company (Landal that is) looking to invest in a UK park, so I guess they would have to set up a UK entity for that. The truth is I don't know much more than that this stage, but certainly would need to know a lot more about the actual contracting entity before taking further - something I'm unlikely to do now. Thanks for looking up those entities and sharing the info you found. 

This is the link they gave me for the FCA - https://register.fca.org.uk/s/firm?id=001b000000MfR2sAAF (if I'm allowed to post links. It is actually in the name of Awaze who they say they are part of). 

@moneysavinghero well this is my concern. I asked a clear question about the guarantees being contractually backed and he seemed pretty confident it would satisfy my solicitor. Having considered some of the points raised, I seriously doubt that. 

Landal Greenparks already have nine UK sites. I cannot see any information on their website https://www.landal.co.uk/ regarding investing in a property on their sites. Are you certain that you are dealing with this large Dutch company, and not someone cloning their name?

jimjames

Bunnymahoney said:

Thanks all for taking the time to comment. A few responses: 

ColdIron said:

Easy enough I suppose to guarantee 8% by returning some of your own money, for a couple of years anyway

@moneysavinghero well this is my concern. I asked a clear question about the guarantees being contractually backed and he seemed pretty confident it would satisfy my solicitor. Having considered some of the points raised, I seriously doubt that. 

I'm sure it would be contractually backed but a contract is only as good as the counterparty. You can't enforce a contract if the other side has gone bust and administrators are picking over the remains. Even if you had a specific lodge assigned to you (not automatically guaranteed as investors in BTL Cars found out ) you still have a lodge that you can't access as it's on a site owned by someone else. Similar situation with airport parking and storage pods. You may own something but if you can't access it's useless but even worse the site can charge fees and you're not able to get out of it so a double whammy.

Hopefully there is enough info to walk away but if not be prepared to lose your money and if you don't then it's a bonus. 

BTW just re-read your reply - if you're adding a Dutch company into the mix then it makes it even more difficult - how would you propose to enforce judgement against a company in Holland? I suspect post-Brexit that the routes for doing so are far harder. 
The FCA link you posted states: This firm currently trades under 91 trading names. It is also very limited what it is covered for so don't assume it means your investment is guaranteed.

dunstonh

This is the link they gave me for the FCA - https://register.fca.org.uk/s/firm?id=001b000000MfR2sAAF (if I'm allowed to post links. It is actually in the name of Awaze who they say they are part of). 

The FCA register indicates that the only investment class permissions held is advising on P2P agreements.   So, what permissions are they using that are relevant to this transaction?

A firm being regulated by the FCA does not automatically mean you get protection in areas that they are not regulated in.  As it stands, I am struggling to see the relevance of FCA authorisation for this sort of transaction.