Langtree back in black and looking for sites

LANGTREE Group’s managing director John Downes has said that he sees opportunities for new developments increasing as the firm reported a return to profit in the year to June 30 of £1.3m, compared with a pre-tax loss of £633,000 last year.

Turnover at the Newton-le-Willows-based property investment and development firm also droppped from £17.5m to £15.1m, but its overall net asset value increased by £3m during to £81m.

Downes said thatthat there had been talk in the property sector for some time about banks either pulling the plug on some failed schemes in order to try and recoup money and release sites back onto the market or restructuring loans in order to allow other schemes to progress.

“As yet these haven’t really come through. I think they (the banks) are gearing up for them next year.

“But we’re in good shape and we’re keen to look at opportunities.”

Downes argued that the the diverse nature of the firm’s current £17m rent roll – derived from a base of 1,000 mainly SME businesses – gave it a “baseload of income” which has allowed it to invest in development projects.

Within the past 12 months, it has started on two of its major development projects in the North West – the new £25m St Helens stadium and the redevelopment of Liverpool’s Garden Festival site.

“From the development side we’re delighted to see these two big schemes onsite.
“When you’ve worked on something for such a long time and the market went they way it did, you think ‘can we keep these on the rails?’.”

The 18,000 sq ft St Helens stadium project is part of a £50m redevelopment of industrial land at Peabody Cross in St Helens. Meanwhile, the work which has begun the Garden Festival site will see the gardens redeveloped by March 2011. Langtree had initially gained consent to build 1,400 apartments and family homes on the site.

“That was secured at a time when the market was quite different to what it is now so there may have to be some recasting of the scheme, but fundamentally the value of the scheme is in that consent,” said Downes.

Langtree, which is owned by chairman Bill Ainscough, also bought back one of two properties it sold to a London-based property fund at the peak of the market in 2006.

The group paid £17m for the Alba Portfolio, which consists of 430,000 sq ft of properties in the North West and Yorkshire. The company also bought back the bank’s share of a joint venture in PxP West Midlands – a business park co-owned alongside Advantage West Midlands.

Notes to the accounts show that it paid Bank of Scotland subsidiary Uberior Investments £500,000 for its 25% share in the joint venture, bringing its own stake in the project (Which is held by Langtree Ventures) up to 50%.

Writing in the firm’s annual report, Ainscough said that Langtree’s approach would remain “cautious”.

“Whilst we are seeing grounds for cautious optimism in certain sectors of the economy, I believe that there remain challenges in the next few years.

“In particular, business confidence remains fragile as the public sector austerity begins to emerge and this will inevitably have a bearing on demand and rents.”