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Property Investment Fund Company Liverpool
by Tony McDonough, Liverpool Daily Post - Business Week.Tony McDonough talks to MATT STAINES, of Property First Asset Management.
MATT STAINES seems pretty laid back for a man whose job it is to make sure the small to medium investors whose money he is entrusted with get a decent return with their property investment funds.
But his relaxed air can be explained by the fact that at 33 he genuinely believes he has found his niche in life, a potentially lucrative niche at that.
Staines holds the modest title of business development manager for the Liverpool-based Property First Asset Management, a fund manager and property developer established only last year.
He is in fact the key figure in the operation, which uses money directly from private investors and from those investing money in SIPPS (Self Invested Personal Pensions) or SASS (Small Self Administered Pension ) funds through their accountants and financial advisers, to construct property schemes to be asset managed.
The Property First fund management team is rapidly gaining a solid reputation for finding property, raising equity from private investors, arranging finance and managing the project from start to finish.
“We are a commercial property company with a property fund management business,†said Staines. “But we have a different way of approaching things.
“We never pay full market value for land or property but instead look to pay up to 40% below. Around 90% of sites we are offered we actually say no to. The kind of deals we look for will often come out of death, divorce or insolvencies.â€
Last month Property First revealed about half of a £12m, 78,500 sq ft office development it is building in Speke had already been sold, despite not being due for completion until summer 2008. The company will be moving there from its current home in Liverpool city centre.
The project, at Liverpool International Business Park, is the firm’s second scheme in four months.
Property First No 1, a £10m mixed-use development in Derby, sold out within four weeks of launch.
So far, a varied client base has been attracted, ranging from the first-time investor with £20,000 to invest, to the experienced investor with millions. First Asset aims to have £1bn worth of property assets under management within five years.
Staines added: “We do not buy property to speculate on capital growth. We acquire the site, see through the project and then manage the asset.
“We look to undertake projects in the £4-12m range. Once you get over the £15m mark for a single development you are then getting into the territory of the larger institutional investors, so we prefer to stay just below the radar.
“There is a huge demand for property as an investment, particularly from people who are looking to boost their pension funds. A single investor might not want to put all their money into one development but they may want some exposure to it.
“It is the same with any form of investment, be it property or equities, you spread the risk and you don’t put all your eggs into one basket.â€
First Asset’s decision to build commercial, rather than residential developments, is a very deliberate one, as Staines feels that at the moment, the latter option is no longer offering the right level of return.
He said: “I think the days of being able to buy apartments off plan and make a decent return from them is over for the time being. We think the market for that has become saturated.
“What happens in places like Liverpool now is that each time new and better residential development is built, the relatively small pool of tenants will move on to that, leaving the slightly older developments empty behind them.
“We think the opportunity is in delivering commercial or mixed-use developments. The city centre office market can be difficult because you are looking to specifically attract the larger, blue chip buyers or tenants. We find there are a lot of small firms out there who are doing very well and are looking to move into quality space up to 2,000 sq ft but are not quite in a position to buy their own building.
“We allow them the opportunity to buy a unit within a development. That can also act as a pension asset.â€
Staines was born in Pontypool but was brought up in south Manchester. He came from a very business-oriented family and in keeping with that tradition, enrolled on a business studies degree at Manchester University.
After graduating he worked in IT helping to deliver major computer infrastructure projects, including one for Barclays.com worth more than £4m.
But parallel to his day job, Staines was busy investing his own money into small property projects and it was this that he found gave him the real buzz.
“I was buying and doing up properties in my own time,†he said. “But after three or four years I decided that was what I wanted to do full time, so I joined an offshore property company doing residential developments. It was a big transition.â€
When Staines landed at First Asset last year he soon knew he’d made the right move.
“It was the best move I ever made,†he added.
“This is a great company with great foresight, and I think we have the right product.
“I like to get on site and see the development for myself, and I like to take the clients along with me. I think it is very much an emotional investment for some of the clients. It certainly is for me.
“This business is very much like a private club and I’d like to think we are all working with people we can trust. We get to know all our clients personally. It is not just about taking peoples’ money and throwing up buildings.
“Everything we do as far as the investors are concerned is completely transparent. We offer clients a medium to long term view and hopefully steady growth, so it is important we get our projects absolutely right.â€
Courtesy of the Liverpool Echo