For Immediate Release
9 June 2008
("Inland" or the "Company")
Update on Land Disposals and Land Market
Inland, which specialises in buying brownfield sites and enhances their value by obtaining planning permission, today makes the following announcement regarding the unconditional sales of a number of small sites and provides general commentary on the current land market in the South and South East of England.
As stated at the time of the interim results and in line with the Company's stated strategy, Inland confirms that the following sites have now been unconditionally sold:
24 building plots for semi-detached and terraced housing at Hatfield, Hertfordshire for £3.65m. Former listed school building at Hatfield, Hertfordshire for £855,000. These two disposals represent an annual internal rate of return of 36.7%. These sales were contracted in March and April.
14 building plots for apartments at Borehamwood, Hertfordshire for £1.25m representing an annual internal rate of return of 66.9%. This sale was contracted in April.
Freehold investment property within our flagship site, Queensgate, Farnborough, Hampshire comprising 10,000 sq ft and generating £85,000 of annual rental income for £1.1m. This sale was contracted in May.
The aforementioned land disposals attracted a good level of interest from property developers and investors and in all cases the consideration achieved exceeded managements own internal expectations of value.
As is well documented in the media sales of new homes throughout the UK have slowed considerably particularly in the last three months where a lack of mortgage finance and falling customer confidence has exacerbated the situation.
In spite of this slowdown there is still demand for land from housebuilders particularly those with short land banks who are seeking sites that have a good planning permission and are ready to start immediately.
The land sales that have been announced today have all been achieved within the last three months and demonstrate this demand.
We anticipate achieving one further land sale prior to the financial year end.
The planning system remains extremely difficult which is limiting the supply of development land with consents which bearing in mind our success in this field does somewhat perversely help our business model.
During the last week of May the Group received resolutions to grant planning permission for over 200 flats and houses on two sites, one in Middlesex the other in Surrey.
The Group currently has planning applications pending on a further 150 residential units as well as a 59 bed hotel on our Exeter site.
The Group's landbank all of which is owned now stands at approximately 1,430 plots of which 600 are now consented as well as 283,000 sq ft of commercial space.
The Group has an overdraft facility of £7 million of which £4 million is currently utilised representing gearing of 7%. The Group is expecting a number net cash inflows that are expected to reduce the gearing further by the year end.
Inland is in a strong financial position and has a prime land bank in the south and we believe the current market conditions will provide some lucrative opportunities over the coming period.
In relation to one such opportunity, Inland is negotiating its potential participation in a transaction which could result in it acquiring a significant portfolio of mainly residential development schemes in the South of England. No price or terms have been agreed for this potential transaction or its financing at present.
Stephen Wicks, CEO of Inland commented:
"Despite the challenging market conditions within the housing sector, the demand for land with detailed planning approved remains intact. We believe the combination of our land division, who manage an excellent network throughout the South and South East, coupled with our experienced planning team leave us confident that Inland can exploit the current slowdown in the housing market and enhance the long-term value of our land bank."
For further information please contact:
Stephen Wicks, Chief Executive
Nish Malde, Finance Director
Jeremy Garcia / Susanna Gale
Tel: 01923 713 600
Tel: 020 7466 5000
About Inland plc
Inland plc is a dynamic developer of urban regeneration projects around Southern England. Predominantly specialising in Brownfield developments, the Inland team can provide solutions to a variety of difficult and sensitive land situations.
Inland successfully navigates the complex planning system, applying meticulous attention to detail throughout the design process whilst utilising its close working relationships with local authorities. Our ability to secure sites often overlooked by others, means our track record in the development of Brownfield opportunities is second to none.
Dawnay, Day Corporate Finance Limited is the Nominated Adviser. David Floyd and Alex Stanbury can be contacted on 020 7630 4140.