26th January 2007
Negotiator – Feat of imagination
Grant Bovey is the largest buyer of off-plan properties in the UK. His buy-to-let business, Imagine Homes, likes to talk to letting and managing agents and is flourishing both at home and abroad, as he tells Rosalind Renshaw.
While his wife appears on television exhorting viewers to be domestic goddesses, Grant Bovey is doing some careful housekeeping of his own.
The husband of Anthea Turner, Bovey appears to be going great guns with his business, Imagine Homes, which he founded just three years ago.
An enormous high-tech sales and marketing showroom offering 14,000 sq ft of space is due to open at the end of February on the Hogarth Roundabout in West London: "Half a million people drive past it every day," says Bovey, who is spending £2 million on fitting it out.
The location is interesting. It may not be glamorous but it is a convenient taxi ride away from Heathrow, and many of Imagine Homes' investor clients come from abroad, eager to buy into the UK property market.
Flotation likely
Imagine Homes also has a sales and marketing suite in Canary Wharf, an office in Dubai, one in Singapore and another in Ireland, all offering UK properties to investors who are keen for a slice of what they see as unstoppable action.
Bovey's company turned over £200 million last year and should do £350 million this. A flotation is on the cards for later this year.
The company deals exclusively in new-build apartment blocks. He currently has seven sites on the go, with another three or four in the pipeline. Some of the developments, for example the Icon in Canary Wharf, are two and a half years away from completion, yet all the apartments are already sold.
"The properties are definitely selling more quickly than we had anticipated. Will the market go wrong? I doubt it. It is pure conjecture, but the truth is that no one really knows. The major lending banks seem as eager as ever to support the property sector, and I believe we are in for a period of moderate growth.
"I don't have a crystal ball but I can see how things will really change. Tenant demand is strong, with people having to wait until they are 30 to 40 before they can get on to the property ladder.
"Ten years ago, it was quite strange for Middle England to own a second property. Now it's quite normal. We have a client who holds down a day job but has 12 properties in his portfolio.
"What we do at Imagine Homes is, in any case, unique, because we give people a lot of comfort and we hold their hands. For example, we give them a two-year guarantee of rental income: if you don't live in the UK, that's particularly appealing."
Imagine Homes sells its properties to investors with the first two years after completion taken care of: the company uses agents to find the tenants, collect the rents and manage the property, and at the end of two years, the property owner can decide whether to sell, move in, hang on to the tenant or find tenants of his or her own. In practice, virtually all hang on to the original tenant, while the property continues to increase in value.
"This suits clients such as a widow with two sons, who wanted to put her money into property but did not want to have to manage them. She now has two properties from us and says she can sleep at night.
The Imagine model also works very well for high net worth individuals," says Bovey. He is not joking: one of his clients has bought £200 million worth of property, all in the UK.
Joint Venture
Imagine Homes also demonstrates its faith in its own developments, with its sister company VERITAS, a joint venture with HBOS, buying 20% of the properties on any one site. This means it is very careful where it buys, avoiding areas of over- supply:" If we were offered 500 units in Bristol, we wouldn't do it. But City Tower, in Canary Wharf, has 156 units and most will go inside three months."
Bovey says markets such as Canary Wharf offer decent capital growth, high tenant demand and a return of around 7.5%.
The firm is equally fussy about its choice of tenants and agents. in Canary Wharf, for example, it uses Felicity J Lord, part of the Spicerhaart group, which secured the contract following a visit from a mystery shopper who had been instructed to contact every lettings agent in the area.
As with the other agents, Felicity J Lord lettings manager Mariella Petralia was unaware that the shopper was acting on behalf of Bovey.
Commenting on their success, Petralia says: "Competition in the rentals market in this area is fierce so this is a fantastic achievement. We pride ourselves on our ability to provide the highest possible level of service, beginning with realistic valuations based on our extensive market knowledge, and are delighted that our approach has resulted in such a sizable contract."
Gina Morgan, head of lettings at Imagine Homes, says: "We do undertake a rigorous quality control assessment. As with all our strategic partners, it is important we find businesses that reflect our core values of service and quality, and our commitment to going that extra mile for our customers."
Growing staff
Currently, there are sites in Yorkshire, Edinburgh and Canary Wharf, where Felicity J Lord have responsibility for City Tower, an apartment block that will be going up in Lime Harbour, Docklands.
The armies of buyers are serviced by a growing staff: around 70 in Farnborough, Hampshire, where Imagine Homes has its headquarters, 20 in Dubai and three each in Ireland and Singapore.
Irish property investors, says Bovey, are particularly keen and will snap up property anywhere in the world: "The fundamental difference is that they have an average spend of £4 million, and will buy 20 units at a time, instead of one. In the UK, investors are more cautious, with an average spend of £300,000."
It is noticeable that Imagine Homes trades only British properties in Dubai: "I am not tempted to go into the Dubai property market. It is the biggest building site in the world, but in my view is expanding beyond belief, and there are supply and demand issues. I cannot see where the global demand for Dubai property is going to come from.
"In Dubai, we sell to people of all nationalities. They feel that the UK housing market is the safest place to put their money."
The company deals exclusively in new-build apartment blocks. There are currently seven sites on the go, with another three or four in the pipeline.