13th April 2007
Property Week – Imagine to seal quick sale of Chelsea flats to investor
Grant Bovey’s company in talks with single purchaser to sell 12-flat, £48m Cheyne Wharf scheme
By Doug Morrison
Imagine Homes, the Buy-to-let management company owned by Grant Bovey, has bought Cheyne Wharf in Chelsea’s Lots Road and is already in talks to sell all 12 flats in the scheme to a single investor.
Imagine bought the scheme from developer Octagon in the past month, and Bovey told Property Week that the fast turnaround is a sign of the continuing strength in the buy-to-let sector.
The sale price is undisclosed, although Bovey said the retail value of Cheyne Wharf would be £48m if it were sold to individual buy-to-let investors. The scheme is due for completion in September.
Bovey has built Imagine into a nationwide business over the past three years and is preparing to float on London’s main stock market early next year through broker Collins Steward and adviser Hawkpoint.
Imagine specialises in buying flats off plan and selling 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 venture between Bovey and Bank of Scotland, usually buys into the same residential developments.
Bovey revealed that Imagine generated turnover of £170m in the year to 31 March with profits of £20m. Forecast turnover for the current year is more than £300m, although Bovey said a change in accounting procedure means that profits will now be calculated from the point of completion, rather than exchange, which has been Imagine’s practice to date.
Imagine recently opened sales offices in Singapore and Dubai to meet growing demand from overseas investors for UK housing.
Research published last week by investment group Assetz identified the UK as the second most profitable country for buy-to-let investors. Its total returns are 63%, behind Poland whose returns are 165%.
A separate study last week by buy-to-let lender Mortgage Trust indicated that recent rises in interest rates have failed to dampen enthusiasm for the sector.
It claimed that 75% of new landlords choose to invest in buy-to-let because they expect higher returns than they would achieve in other investments.
Global stock markets have shown greater volatility so far this year than in recent years, and Mortgage Trust says this has caused landlords to ‘place a heavier weighting on the property aspects of their portfolios’ because they are more confident of the returns than those from other investments.
Stock market uncertainty has influenced Imagine’s flotation, which was originally pencilled in for 2007 rather than 2008. The company’s prospective valuation is now £170m, compared with recent press reports of £200m.