Roskov, Book 20, page 26
‘Buy their shares before the sneaky shits make that announcement.’
‘I’ll use the down days on the market, yes.’
‘If the news they release is good, what kind of a reaction could we see?’
‘A jump, maybe ten percent or more, a good end of year number. I’ll see when they plan to release news; they have to warn the markets of that.’
‘Great, thanks.’
‘Oh, I can get a Reuters screen in the office, small annual payment, and it will show stock news and latest prices. And I can get their data, daily prices and volumes, and display it on a computer screen.’
‘Definitely get one, one of each. I’ll pop in later.’
My lady artist came back, but with her boss the architect, and we sat down in the boardroom.
The architect began, ‘We’ve checked the planned parking and there’s plenty, probably too much, some wasted space on the ground floor.’
‘What could that be used for?’ I asked.
‘Where it sits … not much, maybe extra offices and shops on the sides.’
‘So make twenty office or shop units, and we’ll find the traders for it.’
He made a note. ‘Could put the management offices down there, windows to face the parking area, extra security that way.’
‘Another good idea, yes.’
‘And we could bolt-on the security guard offices and rest room, showers.’
‘Yes,’ I agreed.
‘And finally the building cleaners to have an office. They’d do the stairs and floors in rotation.’
‘Seems that we’ve used up the spare space…’
‘More office space available above the shops. What about sales and rentals?’
I eased back. ‘We’d normally use a local rental agency, their headache. But … this building is supposed to be all us, our management company, so … yes, we could handle the sales and rentals.’
‘What about a pub?’
‘A pub?’
‘Opening to the street, and it opens to the shops as well, does food. There’s plenty of passing trade here.’
‘Yes, a pub, a large one, food served. We’d run it.’
‘And a Roskov wine bar?’
‘Depends on the local clientele. Any rich people in the area?’ I teased.
‘It will be full of rich young people, trust me.’
‘I’ll ask Lucas, but if there’s spare space, yes.’
‘And the make-up of the shops?’ he asked.
‘One large supermarket, then a bread shop, a WHSmith sort of place, a Tescos small shop, our pharmacy, and then … whoever wants to be there. And one 24hr shop with bread and milk.’
‘A furniture and bedding shop would suit.’
‘Yes, we can approach a few and invite them in.’
‘And on the road, a GP’s practise, a dentist, ladies hairdresser, gents. Up above them maybe a chiropractor, then offices for anyone that wants one basically.’
I nodded. ‘Total apartments?’
‘Nine hundred, so potentially eighteen hundred warm bodies, but there are similar tower blocks being built next door. And those buildings will not have shops.’
I handed him the card of the investors’ group. ‘Send sketches and ideas to those people, start a dialogue for me.’
He wrote down the phone number and email address.
I added, ‘I’ll meet with them after they’ve digested the idea, then we’ll talk money and … make a start maybe.’
‘Total build cost would be around a hundred and eighty million without land cost - all concrete and nothing special, just one floor of shops.
‘Selective apartment sales could raise thirty million at the start, then it’s rental money and monthly income. The big apartments could sell for two hundred and fifty thousand, the small ones for sixty thousand or more.
‘Rent is steep in that area, small apartments could be five or six hundred a month plus bills, posh apartment could be two or three grand a month. But when Docklands is finished, rent will double and so will house prices.
‘Then you have the shop and office rental income, and the places that you run directly, like a Roskov Wine bar.’
I told him, ‘Do some figures for me so that Lucas can run them. Typical prices to buy and rent in that area, shop rental prices, and we know what a Roskov Wine bar might make a year, and we can guess at parking charges and the gym income, café income.’
‘I’ll write down as much as I know, but some will be guesswork. The office rental price will be good for that area, and the shops should be busy. I’ll have a London expert look at the figures, latest rental prices etc,’ he offered.
He added, ‘If the residents are happy, and you advertise it well, it could increase the rental income greatly, because they have all they want close at hand and they don’t need to travel out to shop.’
‘What about the nursing homes, any re-design needed?’ I asked.
‘We’ve made a few rooms bigger for the next one to be built, some smaller, a few walls and doors moved, no substantial changes - just small things that help to improve efficiency.
‘No major faults found yet, some wiring to be altered on the next design, drain pipes moved a few feet left or right.’
He left me the latest sketch, which made the planned Docklands building look nice, and he would send copies and technical drawings to the investors’ group.
Sat with the main Swedish manager and his statistics expert, we worked out typical prices - that we might sell a third of the apartments for on opening day, and rental income for the other apartments and offices.
They knew what a Roskov wine bar would make and they extrapolated for the second wine bar and restaurant, the café, the gym, then the office space at current London rates per unit, finally the shops paying us rent.
With the right advertising, and medium-high rent, the management company could make eleven million a year less staff wages.
That would leave roughly a hundred and thirty million in build costs, not including the land. A worry for me.
The main Swedish man began, ‘That seems like a large amount and a small margin, but with a building project like this you have the land, you have the structure for decades, and the income and base value will rise each year.
‘So you have eleven million a year … over about two hundred million invested, but you should not look at covering the land and the capital costs, the building is an asset that can be sold.
‘So … the building costs a hundred and sixty hundred million plus land, and in six years – when Docklands is said to be finished - it is worth four hundred million, plus you have the income each year.
‘This is a property investment, not a business idea, you must see it as land and buildings that will go up in value each year for twenty years.’
I told him, ‘There are other projects where I can invest ten million and double my money quickly, and get access to that money to use over. So this is something I have to think about.
‘Look at the offices and shop rents for me, and what my wine bar and pharmacy will make, the café and gym across a year, a medium to high rate, and shop rents for … thirty shop units or more, probably twice that.
‘Work on the assumption that I’ll advertise the place and … that we could raise rents and have many people visiting from surrounding buildings.’
‘I will do some research and get some figures,’ he promised. ‘But this is no different to buying a house in London. You want the house to double in value, plus you get some rental income.’
I nodded at that, deep in thought.
Over at the property building at 2pm, an hour spent in the constituency offices first, the main people assembled in the boardroom.
I began, ‘OK, we have more money from the government and they want a big push on warm house mortgage fixes - for starters.’
Chessington cut in, ‘I’ve met with twelve families so far, spoke to six more on the phone, no major issues, and they’re all very happy with the deal.
‘They’re not happy at the circumstances that led to them defaulting, but that’s not about you or about Barclays. And local newspapers in Birmingham and Nottingham ran the stories as well.’
Russel noted, ‘No one left in the country that doesn’t know about the scheme.’
‘Good. So take some staff off new house purchases and put them on warm house mortgage fixes till we’ve cleared the backlog.’
‘It could be done by post,’ Russel suggested. ‘A site visit by the rental agency, but the tenant has a special rental contract – we can’t accuse them of damaging furniture when they own it all.
‘Barclays are sending out the info pack to anyone in arrears, the homeowner signs in front of their solicitors, we buy from Barclays in a streamlined way. Eventually it will all be done by post.’
‘Good, we need that, less of a staff overhead here. I met with the Cabinet, and we’ll push hostels and city soft prisons, and a new law that basically says that no one has the right to be homeless, and no homeless person has the right to choose where they want to be homeless.’
‘They all choose London!’ Russel complained.
‘And some choose seaside towns like Bournemouth now,’ I told him. ‘The government will send them home, a kick up the arse and a soft prison to stay in.’
I faced Chessington. ‘How many sign-ups to the poor fund?’
‘A hundred and ten thousand so far.’
‘I want more, so tell them to use the TV advert once a week for a month. Then we’ll reassess.’
He made a note.
‘And do a sneaky thing for me, look at their credit ratings and tell me if they’re genuinely poor.’
‘I can get an assessment without breaking any rules.’
‘Good. And you all use the new software?’
Russel responded, ‘It saves a lot of time, to look-up the last house price in seconds and study the street. They can spot a shit house in a good street now.’
‘How many houses in Northern Ireland now?’ I asked.
‘Heading for three hundred spread around the province,’ Russel told me. ‘Now going up by at least fifty a month.’
‘And O’Leary’s?’
‘Are very busy, and they do a good job.’
‘And the sunshine town of Middlesbrough?
‘The grey shit-tip town … sits at sixty houses bid for, many were repos, another two hundred on the list. Bill has a property in mind for a hostel, and an old hotel for druggies to use. Local estate agents say that people are raising house sale prices, but they’re the good houses and we’re not bidding for them.’
‘Can’t raise the price on a repo home very easily,’ I noted. ‘And just so that you know … there’ll be a big push on clearing the streets of homeless people, soft prisons to be used for assessment and determination as to … are they fit to return to society. If the man is brain dead he stays in a facility -’
‘As it should be,’ my CFO put in. ‘If a pensioner has dementia they get a nursing home. If a drug addict has self-made dementia it’s the same damn thing!’
I nodded at him. ‘So we’ll hold them and sort them out. Some will be rehabilitated and moved, some will be held, and we have an estimated four thousand with AIDS hidden in abandoned houses. They need rounding up.’
‘Sharing needles and sleeping rough,’ Chessington scoffed, and he shook his head. ‘Thatcher’s legacy.’
‘Oh, we now have a stock market trading account, and my experts tell me that it’s legal for the subsidiary of a charity to trade the stock markets, profits donated back to the charity – no tax on the trading if done so.’
Chessington asked, ‘What will you trade?’
‘My billionaire friends in Corsica get good information from time to time, and they always seem to know what the markets are doing. My friends have taken that advice in the past and doubled their money quickly.
‘The Kudulov team also have some excellent stock pickers, so they’ll suggest things to me. And they say that between now and the end of the year our British FTSE will make twelve percent, so we may buy ten million quid’s worth of shares and hope to make that twelve percent.’
Chessington noted, ‘Billionaires always know what the markets will do.’
I added, ‘Where I’m about to buy a shit load of supplies for the nursing homes I may buy shares in those companies first. Is that legal?’
Chessington responded, ‘Yes, you’re not colluding with them, just making a profit from a supplier that you intend to boost, a common practice.
‘But if someone told you that they were going to be taken over, and … please buy some shares and split the profit back with me later, that would be illegal, but only if you or them are regulated by the stock markets and you hide something from other potential investors.’
‘If I buy shares in a Belfast company, then boost them somehow…’
‘If they’re not listed there’s no law broken. They need to be listed. And if the profits go back to a charity, even less in the way of laws broken.’
‘I’ll always check first, no collusion accusations in the media.’ I faced Russel. ‘Has any other bank shown interest in warm house mortgage fixes?’
‘Had a letter from HSBC, and they’re considering it and want our ideas.’
‘I want it tested every which way with Barclays first. So look for that difficult customer that says he made a mistake and should have sold the house.’
‘Can’t sell the house,’ Chessington put in. ‘Barclays would have a charge over it. So they get evicted or … they get evicted.’
‘And if they lived in that house for ten years and then fell into hard times…’
‘Same difference, you can’t sell a house with a mortgage without letting the mortgage lender know first. That would be fraud. The mortgage has first priority to be paid off, with early sale fees and penalties.’
‘So there’s nothing that a difficult arsehole could complain about?’
‘They could complain about our bank fees and the interest payments lost, but apart from that … no. And they could not complain about you unless the rental agreement says that they can definitely buy it back at the same price whenever they choose.’
I faced Russel. ‘That rental agreement…’
‘Makes no promises, suggests some hopes for the future. Just that. They’re free to sell the furniture and move out with thirty days’ notice, they cannot remove wallpaper and light fittings, they can take the carpets.’
‘More than generous of us,’ I noted.
‘Very generous,’ Chessington added.
Our Civil Servant put in, ‘We transferred money from the Regeneration Fund, and 147 Southwark is now owned by The Crown, this place as the nominated management company.’
‘It was their job in the first damn place!’ I complained. ‘I was told to … learn as I go in the first term.’
‘Bloody ridiculous,’ my CFO put in.
I faced Russel. ‘On my next trip to Corsica I’ll peg out land to buy, for a fund here, two hundred thousand per plot. Not sure which fund, maybe the Barclays rich fund, and Blair said it was OK if his Regeneration Fund made some extra money on the side.
‘And the charity will want some extra money on the side as well. Villas cost around two hundred thousand to build and furnish, and could then sell for a million.’
‘Nice margin,’ Russel noted. ‘Very nice. Won’t see that in this bloody country.’
‘I control the land down there and the sales process, so … I’ll help the funds. But we need to check the law because I do, technically, own the land, or the right to sell it and hand a third back to the island.’
Russel told me, ‘Is two hundred grand fair value?’
‘Less, it’s almost two acres with a view.’
‘So it’s OK, you’re not inflating the land price to benefit yourself. Quite the opposite, you’re conspiring to hand a good profit to the funds, which … would be an odd day in court, very odd.’
Chessington smiled. ‘Conspiring to make money for a charity to help the homeless. Yes, an odd day in court.’
I asked him, ‘How many Barclays warm repos would there be?’
‘They occur each month, at a rate of about three hundred new cases each month. If you ignore the backlog … you’ll need to handle that many each month.
‘And the backlog is basically three or four months’ worth, so about twelve hundred, then there are those people that are six months in arrears, part paying, about to be evicted. A few thousand.’
‘Total?’
‘With what you’ve taken already, three thousand left to do then three hundred a month ongoing.’
Russel put in, ‘We can do most of those in … six weeks. Then it’s the monthly number, then the other banks. So it could be fifteen hundred a month for all banks nationally, by the end of this year.’
‘So let’s plan for that number, as well as grabbing the cold houses; we’ll do the easy stuff first. Come September we’ll sit down with any other bank that wants to talk, but I’d send them the Barclays style of deal and say … like it or lump it.’
‘They’ll take it,’ Chessington insisted. ‘Trust me.’
‘Cellar coming along?’ I asked.
‘Slow progress to dry out the damn walls,’ Russel told me. ‘Can’t do anything with damp walls, and they’re more than damp they’re downright wet. We have hot air blowers all day, vents open.’
I nodded. ‘Any questions or issues?’
My smart NI chap put in, ‘We have the drains company expanding in Belfast, and then we have the building company. That company, they had the chance of a house-building deal, I made a call in your name and secured that deal, so they have twenty houses to build, which will keep them busy for months.’
‘Good.’
He added, ‘We created and registered our own building company, and we’re looking to secure the Belfast land that the council nudged us towards, a new housing estate, and our company will get eighty out of three hundred houses to build. We wanted the other companies included, jobs created.’
‘Yes, always.’
‘That new company will soon start sending men here, to Leicester and then Manchester and Nottingham and Derby, where you’re building nursing homes. The building companies we use here have agreed to take a few dozen men, or else.’
