Source : New Paper – 9 Sep 2009
Some see red over investment companies’ unlikely push to develop UK’s greenbelt
IF YOU are a football fan, you have probably seen the television commercials exhorting you to invest in land in the UK.
Thousands of investors in several countries, including Singapore, did, hoping to make a huge profit.
After all, the Singapore-based company is called Profitable Group.
But the big question remains: Will the piece of land, now in a ‘greenbelt’ zone in Hounslow, near London, ever be developed?
The Profitable Group said in its brochures that the 48ha site, which it called Concorde Village, would be suitable for 1,000 houses, estimating that planning approval would come in 2012.
However, the Hounslow Council told The New Paper that the land is unlikely to be re-zoned for development in the near future.
Its spokesman said: ‘There have been informal proposals to alter the site’s greenbelt status, but they haven’t been successful.
‘We would have ‘in principle’ objections to that at local, regional and national level.
‘Any formal application to change that (greenbelt) status would have to go through the Secretary of State and there’s not a great chance of success for anyone looking to do that.’
The Profitable Group had claimed investors could get 250 per cent returns if the land is approved for development.
The company, whose commercial director is former Liverpool midfielder Steve McMahon, helped to organise the football club’s friendly match here in July.
It also gained media attention when it expressed interest in buying Newcastle football club, though nothing has materialised so far.
Last October, Malaysian authorities raided the Kuala Lumpur offices of Profitable Group and Canadian-based Edgeworth Properties after getting complaints that they were offering illegal investment schemes for UK and Canadian land. Both companies were cleared in June this year after it was found that they had issued genuine title deeds to investors.
Warnings from UK experts
The Profitable Group had bought the Hounslow land for £3.15 million ($7.4m) in 2006, The Hounslow Chronicle reported on 20 Aug.
It then subdivided and resold the land to investors at £8,000 for an individual plot of 576 sq ft.
Mr Henry Wu, 50, is a Singaporean who paid about $18,000 for a plot, hoping for a windfall.
He said: ‘There are risks in every investment and the returns could be bigger than investing in property in Singapore.
‘But as it’s a long-term commitment. I agreed only when I felt I could tie up the funds for several years.’
UK property specialists warn consumers to be wary of companies selling plots of greenbelt land that they claim will soar in value if reclassified for housing.
‘Be incredibly wary,’ says Mr Justin Gaze, an analyst with property consultancy Knight Frank’s London office. ‘I’ve never known one of these greenbelt plots to be redesignated. In fact, splitting sites into tiny plots only makes the land unattractive to developers because all the owners must agree to the sale.’
Mr Gaze explained that greenbelt land is unlikely to be re-zoned as it separates urban areas from rural areas and stops the urban sprawl.
Wealth management firm Providend’s chief investment strategist, Mr Daryl Liew, said it does not recommend land banking to its clients.
He said: ‘The first rule is always to know what you’re investing in. Assess the potential of the land and if possible, personally inspect the plot.’
The Royal Institution of Chartered Surveyors in the UK told The New Paper that protection against development on greenbelt land is so strong that redesignation for housing is unlikely.
Its spokesman said: ‘It’s possible that development will be allowed in the future but, unless and until planning permission has been granted by the government, it’s not assured.’
Not within company’s control
When we related the UK experts’ misgivings to the Profitable Group’s group operations director, Mr John Nordmann, he got his planning agents to tell us that the time frame for the land to be re-zoned was beyond the company’s control.
In an e-mail response, the planners claimed: ‘Concorde Village is in a ward with a high level of social deprivation and there is a shortage of open space which could be addressed by development. A strong case (for re-zoning) therefore exists at the appropriate time.’
As to how developers would view subdivided land, Mr Nordmann agreed that having multiple owners could lead to problems of getting all of them to agree to sell the land.
To overcome this problem, Mr Nordmann said the company has an ‘option agreement’ which obliges all plot owners to sell the land upon planning permission being granted.
He said the company has kept 20 per cent of the site for itself.
He said: ‘We retain a good proportion of the land we’re offering for ourselves. Our return is exactly the same as our clients would make. This shows the company has a vested interest in achieving planning in the shortest possible time.’
_____
Feedback sought for development
LAST September, Profitable Group’s planning agents in the UK, DLP Planning, held a public exhibition in Hounslow to inform residents in the area of its plans to develop Concorde Village. Residents from 5,500 households within 800m of the entrance to Concorde Village were invited and their feedback sought.
DLP went ahead with the consultation despite the Hounslow Council saying it would not allow the greenbelt land to be developed, reported the Hounslow Chronicle on 20 Aug.
DLP outlined three concepts for the proposed development, each proposing to develop varying segments of Concorde Village into housing and facilities like playgrounds and open-air theatres.
Residents have expressed concern with rezoning greenbelt land and taking that feedback into account, DLP tweaked its plans to include new trees and a green corridor to provide wildlife refuge.
No comments:
Post a Comment