We had a quick chat with Mark Holden, CEO of Go-Develop, the co-lender for the Nash Asset Lending Bond who is investing alongside Brickowner in every project they approve for investment. Mark has over 30 years experience in the property industry with over 300 assets, so we were interested in what he had to say about our latest investment:
How did you get into property development lending?
By 2011 having built a personal portfolio of over 120 dwellings I felt my tenanted holding portfolio was approaching the upper limit of what I wanted to hold and manage. However me and my team had the skills, capital and motivation to keep getting involved in more projects. At the same time it became apparent that small independent house builders (<200 units per annum) had been decimated. Those that were left could not access enough funding to build out even the best schemes as the banks became less co-operative – yet against this there was a shortage of 750k houses in the UK and the situation was getting worse by 250k per annum. So there was an ideal opportunity to deploy my team’s skills and my own capital to fill this gap. I could have kept going as principal developer and sold off the schemes but it seemed to me that there were so many great small housebuilding firms with high quality projects ready so I focused on the opportunity to finance them rather than work independently.
What interested you in partnering with Nash and what benefits do you think that offers investors?
Initially my business was funded by my own capital, then some UNHW (Ultra-High Net Worth) investors joined me and then some institutions. Therefore to start with I never thought about the wider HNW (High Net Worth) investor space. However the team at Nash Group (in whom I am an investor) persuaded me that having an additional type of capital from HNW’s could provide a meaningful long term capital source. The Nash team also demonstrated that my business could offer a higher return with a lower risk profile than the majority of the other bridging and P2P asset lending propositions in the market. I liked the idea of providing a market leading proposition and working with the team at Nash allowed me to have a relationship with one single organisation – Nash Asset Lending PLC.
What do you look for in a project before deciding whether you will lend or not?
After 30 years of successful projects we look for opportunities which meet our strict criteria of no planning risk, healthy margins, high demand locations, modest sale value and especially a low land value – as this is one of the most volatile part of a building’s capital structure. We also (as a development funder) look for high quality developers to work with who can demonstrate an ability to deliver on time and on cost. Finally the overarching factor is exit, we want to finance properties which can and will be sold efficiently.
What is unique about the Nash Asset Lending property bond compared to other similar products available at the moment?
The Nash Asset Lending property bond is unique in that it delivers a strong coupon from a proposition that entails co-lending only up to 67.5% LTV with a proven expert property development and finance team with a 30 year excellent track record. Very importantly we, the co-lending partner, have subordinate capital to Nash Asset Lending at risk in every loan that it undertakes. Furthermore as co-lending partner we have pledged any of our past, present or future co-lending returns as additional collateral to Nash Asset Lending. Finally we with Nash Asset Lending are careful to only finance moderately priced dwellings with a limited land value exposure.
If you could be involved in any property project in the world, what would it be and why?
I am afraid to say it wouldn’t be anything huge or spectacular. I really enjoy helping to build small and unique schemes of sensibly priced houses in a location that they are needed to a specification that suits the local market. That is good solid business with decent margins and swift exits. There is a huge potential in the regions where income is only 10% lower than the south east but land values are a quarter.