Imperial Corporate Capital PLC (ICC) is a residential property developer with a mass of sector experience and a pipeline of developments that is primed to benefit from the government’s new push for new housing.
Furthermore, the residential property sector is going through what has been called a “mini boom” by analysts after the lockdown was lifted and plenty of pent-up demand was revealed.
The company has just won planning permission for Nightingale Grove, a 16-apartment development in Lewisham, where it says there has been plenty of buyer interest already.
Downing Street’s planned changes to relax UK planning permission rules will slash a significant amount of time out of the development period for the company’s other properties in future too.
The company’s portfolio of sites, ranges from single units up to a 200-acre site in a village called Toft, near Cambridge, where as well as an existing golf course, ICC has gained planning for a boutique hotel and plans to add conference facilities and is talks with the PGA about potentially creating a retirement village.
Adding to the pipeline has become less simple because of the government’s planning changes, says communications director David Kass.
But thanks to the company’s shrewd management team, he expects things to play into their hands.
“Previously we were looking for brownfield land, but everyone’s cottoned to this now, so it’s made finding those sort of sites a bit harder for us.
“So now what we’re focusing on now is smaller sites – things we can get into and out of within a year – and we’re looking to scale up in terms of volume. So instead of doing one £10mln project we will do ten £1mln projects.”
Because of the coronavirus pandemic, developers that would normally buy larger sites from ICC are not splashing about with the most liquidity, which has necessitated the refocus on family homes.
But the benefits to the company are twofold.
“Instead of relying on big sales, shifting ourselves to doing multiple smaller sales, we know that the market always exists domestically in the UK so you’re not reliant on international buyers,” says Kass.
“I feel like the real discounts are going to happen at the end of this year and the beginning of next year as I don’t feel like the market’s reacted enough.
“The government has done well to support business and keep those afloat that wouldn’t have been able to survive up until now otherwise. But I think there’s developers that are over-leveraged and wouldn’t be able to fund their companies if it wasn’t for the furlough and emergency loan schemes allowing them stay afloat without having to sell any assets – but these schemes are coming to an end in the next couple of months.
“What they will be forced to do is sell certain assets, quick sales, to drop their loan-to-value ratios. Developers will need to find cash quickly.
“The reason why we know this is that our founders have been through it, back in 2008, 2009.”
While Kass joined from the financial services sector, co-founding trio Bobby Singh, Fabeo Russell and Justin Fletcher have been private property developers almost since birth.
ICC aims to only take on projects where it can make a 30% return or higher, allowing “more than enough margin” to be able to give an attractive rate of return to investors, says Kass.
“We wouldn’t always offer such a high return, but it’s worth it because the way we expect the market to turn there will be deals we get this year that we won’t see for another 10 years probably.”
Published at Wed, 23 Sep 2020 15:02:00 +0000-Imperial Corporate Capital uses wealth of experience to play residential property market