Derwent Group set to hit property acquisition trail
Retail park developer and owner Derwent Group is gearing up for a transition into an acquisitive property investor as it homes in on its turnover target of £50m.
Speaking at the inaugural property lunch hosted by TheBusinessDesk.com in Manchester, Derwent Group chief executive David Lyons said the Isle of Man-headquartered company founded by Kwik Save entrepreneur Albert Gubay had already begun its programme of acquisitions.
“We have already started our acquisition strategy with the purchase of Cardinal House in Manchester and a large logistics building in Ireland,” Lyons told the audience at the Grafene restaurant off King Street.
Lyons underlined the ambition to transition from developer to investor in order to achieve a yield of 7% plus and “outstrip the market.
“We believe we can do this within two to three years,” he said.
“When I say we won’t be a developer, I really mean we won’t undertake green field developments. But we will purchase existing properties for refurbishment.
“I see future years as rebalancing the portfolio through acquisitions and disposals. This will see our income grow substantially and consequently our dividend to the charity will also grow substantially.”
Lyons, who was recruited by Gubay six years ago, told an amusing story which exemplified the late entrepreneur’s spirit when he said: “I recall one day in particular when I said to him, ‘I have a plan’. “We are at £23m a year (revenue) and I think we can get it up to £50m in three to five years.
“The veil slipped slightly as he looked at me with amazement and smiled, and then he recovered and said, ‘is that all you can do?’
“Sadly, he did not see that goal achieved, but we are well on the way – approaching £35m at the moment, with a property portfolio valued at £500m.”
Derwent Group’s biggest undertaking is the £100m Liverpool Shopping Park at Edge Lane, a near 1 million sq ft facility at the gateway into the city.
“We have nine retail parks with a total area of 1.2 million sq ft,” continued Lyons. “On completion of Liverpool Shopping Park this will be close to 2 million sq ft.
“Derwent is rated as the 17th largest owner of retail parks in the UK and the fourth largest in the North. Post deliver of LSP, we will be the largest in the North.”
Lyons also hailed the “team effort” behind the achievements of the company saying it had involved “a huge shift around in personnel, image, brand, culture and external relationships, particularly with local authorities and retailers”.
To see a picture gallery of the property lunch click here
