Muse ‘targeting’ distressed developments
THE boss of property company Muse Developments has said it is actively looking for opportunities to jump in on distressed developments.
Matt Crompton, who is joint managing director of Salford-based Muse Developments with Nigel Franklin, told TheBusinessDesk that the company has a keen eye on “half a dozen” land opportunities and development agreements that could soon falter, across the country.
He said: “We are targeting existing projects that are in trouble where agreements are already in place.”
He said that parent company Morgan Sindall, which on Monday announced pre-tax profit s of £23.9m for the six months to June 30, 2009, is cash positive, allowing the company to invest at a time when others are struggling to access funding.
“We don’t want to be overstretched but it does mean that when opportunities come along we can take advantage,” he said.
“There are sites and relationships we are spending time observing,” he said, adding that some were in the North West. “For us it’s about winning one or two big projects”.
Mr Crompton said that the company’s approach to development meant it was able to ride out tough times, when others fall by the way side.
“We are reasonably fortunate, we are not a typical developer in that we don’t own large land banks. Instead we control lots of land using agreements with partners, such as local authorities who are landowners but are cash poor. For us the cost of entry is relatively low but we then get the development rights for that land.
“We’ve done that model for almost 30 years. We developed Barbirolli Square and Cheadle Royal in the last recession.
“We steer a steady course, we don’t make as much money as those who bought land at the bottom and sold at the top, but now we are doing better than they do.”
But Mr Crompton added that there is not the same amount of distressed property being released as in the last recession because banks are waiving loan covenants, so long as the interest is being serviced.
“That will change when interest rates start to rise, or over time as people run out of cash,” he said.
