LJ Capital and GB Developments have formed a joint venture to invest into new build central London property. Seed corn equity will be introduced by both parties and co invested with a number of LJ’s existing clients and funds already under management.
The joint venture will enter forward commitment positions with developers seeking to de risk either a part or whole of their scheme and satisfy the requirements of their respective development funding agreements. Returns will be aligned to the success of the project via sales rates and values. It’s anticipated the majority of stock will be apartments, fall within the £500 - £1,500 persqft price bracket, be 18 – 36 months from completion and from developers with a strong track record of deliverability. Areas will be targeted for above average growth potential and stock selected based upon an agreed investment criteria.
LJ Capital is the merchant banking arm of LJ Group which is an independent and privately-held merchant bank and investment house with more than US$5 billion of assets under supervision. They have teams in Europe, Asia Pacific, South America and Africa have a track record of building successful businesses, having transacted, advised and managed over US$30 billion of assets in multiple jurisdictions worldwide. They pride themselves in providing clients with access to talented teams with proven capabilities, as well as access to unique proprietary investment opportunities.
LJ Capital is backed by a number of partners, including the owners of Guggenheim Partners Latin America Inc., and Guggenheim Investment Advisors (Suisse) and serves a client base that includes high net worth individuals, family offices, foundations, private equity groups, and sovereign wealth funds.
GB Developments is a privately owned company that has invested in the central London new build market since 1998. They have purchased in excess of £100m of central London property and will take primary responsibility for the sourcing, acquisition, disposal and management of the properties. GB has considerable experience gained in all market conditions and has a significant existing rental portfolio.
Simon Grace, Managing Director of GB Developments, commented “This new joint venture will provide third party developers with a route to secure forward sales whilst maintaining their ability to share in sales values achieved over the course of construction. We can offer the advantages of strong financial backing without the disadvantages incumbent upon some residential funds which can ultimately result in inactivity.”
Andrew Williams, co-founder and CEO of LJ Capital, commented “This joint venture will enhance LJ’s ability to satisfy the ever present demand from our clients to invest in Central London property. It will offer them the ability to access pre-release stock unavailable to most in the market. Returns will be achieved through pre completion sales in combination with the yield obtained on completed stock through rents and capital appreciation. This stock will in turn create a new build, well let, well managed, low maintenance portfolio with a number of disposal options in due course.”
Andrew Williams and Simon Grace previously worked together on the boards of Colliers RH and Cushman and Wakefield Residential between 1999 and 2006. During this period they managed a team responsible for the sale of in excess of £500m worth of central London new build apartments.
