21st September 2007
Property Week – HBOS Imagines buy-to-let profit with Bovey
HBOS has agreed to buy an equity stake in Grant Bovey’s buy-to-let management firm Imagine Homes.
The entrepreneur hopes this will be seen as a vote of confidence in the company before its planned flotation on the London stock market.
Agreed last week, the deal will give Imagine the leveraged firepower to buy up to £300m of properties, according to Bovey. He now plans to float the company in 2009, having originally pencilled in a listing in 2008. HBOS is to inject £37.5m into Imagine and Bovey said the equity deal is based on the company’s performance.
‘It is likely that at point of flotation they would control around 20% of the ordinary shares,’ he said.
Imagine’s niche is to buy flats off plan and sell them on to buy-to-let investors with tenants already in place and a guaranteed 7.5% yield for two years. Veritas, a separate joint fund between Bovey and HBOS, usually buys into the same residential schemes.
Bovey said: ‘I’ve stated it’s our intention to float Imagine Homes at some point in the future. That’s still very much our intention.
‘However, it became apparent to me that having an institutional equity partner would be a distinct advantage to take the company to the next level prior to the intended flotation.’
He added: ‘We’ve clearly got another raft of funding into the business in the new deal with HBOS, which will enable me to go and acquire significantly more opportunities. We’re very keen to expand what we’re doing.
‘It’s just a continuation of what already is a good relationship.’
The decision to delay the flotation came as the global credit crunch has sparked turmoil on the London stock market. Bovey insisted, however, that the uncertainty has not affected Imagine’s business.
HBOS was instrumental in strengthening Imagine’s board with the appointment of Scottish entrepreneur Colin Rutherford as chairman. Separately, it is ploughing a further £80m into Veritas. ‘HBOS believe in buy-to-let.’ Said Bovey.