29th October 2006
The Sunday Times – Smooth operator
Is Grant Bovey's big idea as good as he claims, wonders Rosie Millard
There is something rather winning about grant Bovey. Having been torn apart for promoting a chocolate bar in his wedding pictures with television presenter Anthea Turner, he is sufficiently relaxed to allow references to it on his company's website, in an article that also savages his hair ("over-gelled") and his smile ("cheesy"). All of which is quite impressive.
Bovey, 45, also likes to think of himself as an ordinary person like you or me. "I wanted to invest in property," he explains, "but I didn't want the risk.
"I was unhappy about the idea of voids and I didn't want the chore of furnishing a flat. I don't know anything about furniture." Oh, Grant.
"No," he says, "the whole thing just didn't stack up. Then about three years ago I started thinking seriously about property investment, because I was interested in buying Kew Riverside."
At this point, my (and probably your) experiences and those of Grant Bovey begin to diverge. Kew Riverside, on the south bank of the Thames, was for sale at £13m. Bovey, a former television producer with zero experience in property, other than buying and selling his own homes, didn't want a single flat. He wanted the whole £13m block.
In the end, even that wasn't enough for him. He decided to invent a company that would revolutionise the whole procedure.
Forget buy-to-let. With Bovey's company, Imagine Homes, investors could go for buy-already-let. He now considers his firm the perfect vehicle for the hesitant investor.
"It was born out of the frustrations I felt," he explains. "I drew up a list of all the things that would make me want to buy an investment property, and tried to supply them.
"For example, has the prior owner done the right type of research to ensure there will be good capital gain? That there will be no rental voids and that the yields will be high? And that's what we did!"
Imagine Homes, which has 100 employees and a £300m turnover, is what's known as a "turnkey" solution for investors. The idea is simple, Bovey and his team search out developments in emerging hotspots, or buildings in areas such as Canary Wharf, where further capital growth is not guaranteed, but likely.
Imagine Homes buys the development from the builder, at a discount. The company then sells 80% of it, off-plan, to investors - or owner-occupiers, whom Bovey says are 20% of his clients. When the building completes, investors can rent it out independently or, at a management fee of 10% of the rental, Imagine Homes will rent it out for them for two years at a guaranteed rental yield of 7.5%.
Investors must buy a furnishing pack from Imagine, costing from £7,000 to £11,000, but this further outlay is offset by the very real pleasure of a cheque comprising rental thudding on their doormat the day after completion. A year later, the Imagine investor will receive a second year's rental cheque. After this, investors either sell up, take over the management themselves or continue renting with Imagine for a fee (and no guaranteed yield).
Will they be left with a pig in a poke? Bovey hopes clients will be reassured by knowing that, as he still owns 20% of the building, it is unlikely to be in a duff rental area.
Three Bovey companies manage the dealings of his giant property portfolio: Imagine Homes which he says has a buying power of £500m, Veritas Investment, a joint venture with the Bank of Scotland, whose buying power is £250m and Veritas One, a minnow with available funds of £100m.
Bovey has just bought two towers at Canary Wharf. Yes, towers. City Tower with 151 units, and The Icon with 152. He says it takes him about five months to sell a development off-plan "We have 4,000 names on our database. We make buying property easy for people."
He thinks he has a unique product. He could be right. "Nobody else is doing what we do on a national scale. Sure, some developers might offer guaranteed rental income for a period, in one or two of their buildings, but not across the board.
"We operate with local builders and national builders. We work with a network of rental agents. Nobody else has set out to make buy-to-let as accessible as we do. Frankly, I think that developers sell to investors more by mistake than on purpose."
While Imagine Homes only operates in the UK, 50% of its revenue comes from abroad. "We have an office In Dubai, which does half of all our sales. London is perceived to be the safest place for property investment in the world."
Indeed, Bovey is so emboldened by his success that Imagine Homes is shortly to open the country's first buy-to-let "showroom" at the Hogarth roundabout in Chiswick, west London, in which he will show off the future developments and what he calls "furniture solutions".
So can everything be quite as good as it seems? Not everyone is entirely convinced: Tim Hyatt, head of lettings at Knight Frank, has been around one of Imagine Homes' show flats in Canary Wharf and warns that investors should not count on continuing to earn 7.5% after the rental guarantee period elapses. "Our index for central London is only just cracking 5% he says. "I would urge investors to seek independent advice on where the rental market will be in five years time and about the sort of area they are buying into - it is a risky one or an emerging one?"
For over an hour, I give all the bad stuff to Bovey, but it just bounces off him. "It doesn't matter where the site is," he says. "We've done all the hard work! The buy-to-let market is a £10 billion market!"
He courteously takes his leave of me and climbs into a large, black, chauffeur-driven Bentley. Five minutes later I notice it has been parked opposite an estate agency further down the road.