Nama in spotlight as €2bn Battersea profit predicted
NAMA’S decision to sell its interest in London’s iconic Battersea Power Station has been called into question once again, with the revelation that its new owners expect to make a profit of Stg£1.8bn (€2.02bn) from its development.
The eye-watering projection is contained in an assessment of Battersea’s potential conducted in 2008 by BNP Paribas Real Estate for Wandsworth Council, the local authority with responsibility for the area.
While the £1.8bn figure has been met with anger in London, owing to Wandsworth Council’s approval of an application from Battersea’s owners to reduce the number of affordable homes on the site, the predicted profit will also invariably serve to fuel criticism of Nama’s decision to dispose of its interest in 2012.
That criticism has, unsurprisingly, been led by developer Johnny Ronan whose former company, Treasury Holdings, controlled the site prior to its acquistion out of receivership by a Malaysian consortium of SP Setia, Sime Darby and the Employees’ Pension Fund of Malaysia (EPF).
Nama, for its part, has consistently argued that it sold out of Battersea Power Station at the right time, and for the right price. Defending the decision in 2014 against claims that Nama should at least have held out for a higher price, Nama chairman Frank Daly said: “We didn’t sell early, we sold at the right time. We sold that loan for Stg£500m [€600m]. So we got back the full value of the loan.”
Mr Daly added that the idea that Nama should have held on and developed Battersea and other London sites with a view to recouping billions of euro down the road for the Irish taxpayer “misses the reality”. He claimed the Battersea development alone would amounted to a “€6bn property play in London with no guarantee of a return”.
Wandsworth Council, meanwhile, has sought to downplay the Stg£1.8bn profit projected for Battersea, with a spokesman saying that the estimate dates from a viability study conducted for the site in 2008.
Notwithstanding Nama and Wandsworth Council’s respective views on Battersea’s potential, the site is acknowledged by the property industry globally as the best undeveloped land left on London’s riverside.
Only recently, PropertyEU magazine recognised Battersea Power Station’s acquisition out of receivership by its current owners as the ‘Development Deal of the Decade’. Commenting on the progress of the Battersea’s regeneration to date, the jury said: “The redevelopment is proving a success, with the first two phases breaking records for the number of apartments sold and prices achieved. Phase 1 saw the most successful sales event ever in London, with over 850 apartments sold in just four weeks for Stg£750m, while Phase 2 generated Stg£600m of sales in four days.”
Last week, Battersea Power Station Development Company CEO Rob Tincknell secured 43rd spot in Property Week’s ‘Power 100’. The magazine recognised Mr Tincknell (the former managing director for the UK and international arm of Treasury Holdings), for having landed the biggest deal of 2016 when Battersea signed up Apple as tenants. The 46,500 sq m (500,000 sq ft) deal will see 1,400 of the US tech giant’s employees based at Battersea when it opens in 2021.
AN interesting consequence of writing this column is the number of times readers send me copies of complaints they have made to estate agents. They also e-mail me with the details of a problem they are having with an agent, and ask for my opinion. Naturally, I don’t get involved in any of these. However, while the volume of deals is down, the amount of complaints I’m seeing is increasing. I put this down to the reversion to private ownership of property, following re-sales of insolvency portfolios.
The notable thing about these complaints is that they tend to be about the same issues, and agents make the same mistakes in dealing with them. So what are the pitfalls to avoid, and how can agents actually strengthen their relationships with clients, through better handling of complaints?
The classic problem that arises is when a sale has failed to materialise as expected and that first f lush of enthusiasm and hope is evaporating. Complaints rarely arise when a property has sold for above the expected price, but it’s a different story when the advertising budget has been spent and the viewings haven’t resulted in any offers. The client was lavished with attention and positivity when the agent was trying to win their instructions, but once the property starts ‘going stale’, vendors sometimes feel their agent changes tune and begins ‘managing their expectations’ downwards. Some complainants say that they begin to question who their agent is acting for — them or the offeror!
The requirement for agents to advise their clients of the advised minimum value in writing has reduced this problem but agents should be aware that a client, who has paid their fee after a difficult sale, is not necessarily going around extolling their agent’s virtues.
A common complaint arises over a lack of contact from an agent. This is down to human nature as it’s far more pleasant to be ringing clients whose sales are going well, than those whose campaigns have gone f lat. However, it’s this latter category that needs the most attention. Once you feel the momentum going out of an instruction, pause and come up with some positive ideas to re-inject life into the sale and keep calling your client. This will maintain a much healthier relationship with your vendor, you’ll be more likely to agree on a deal together, and they will appreciate your enthusiasm and the fact that you are not giving up.
When a client complains, be grateful, because they have given you a chance to rectify the problem, whereas most unhappy clients are going around damaging your reputation without you knowing about it. When a client (or prospective purchaser) does complain, make sure that you respond immediately. Almost every response I see to complaints starts off with “please accept my apologies for the delay in responding” — but gives no reason why there has been a delay. This is a huge mistake as every complainant is angry by the time they complain and they will get angrier every day that you leave them festering, making the problem harder to resolve.
Most businesses use the protective shield of e-mail when handling complaints. The only reason for that is that it’s THE estate agency business was saddened by the death of David O’Neill last week. A barrister and chartered surveyor, he had a distinguished career with Lisney and Hamilton Osborne King (Savills). David was a gentleman, highly respected by clients as a valuer and always ready to help out a fellow surveyor with friendly, expert advice. May he rest in peace.
Battersea Power Station is acknowledged as the best undeveloped land on London’s riverside