Northacre set to reap rewards from London's prime house price boom.

Saturday, Jul 17 2010 by
6

Northacre (LON:NTA) has had a hard life on London;s Aim market over the last 10 years, building fantastic, quality multi million pound houses and flats, but never making any real profits. That appears to be about to change with its flagship project The Lancasters overlooking Hyde park.

Northacre purchased the former Thistle hotel at Lancaster Gate in 2006 for £67M in a joint venture with Minerva
In 2007 Northacre gained planning for 74 super flats and two town houses. Days later Minerva pulled off a trick of a lifetime refinanceing the land loan, [ on the back of the increased land value.] A new £215M land, build, and interest loan was agreed just hours prior to the 2007 credit crunch.

Today , a year away from completion, 50% of the scheme has been pre sold at prices double the going rate in Westminster back in 2006 when the site was aquired. Total projected sales are now looking to come in around £500 Million

Very few large projects ever come out on budget , so it might be advisable to slap on an extra £50M in costs and remove £35M from projected sales[ if the market turns down a tad.] The joint venture equity is split 95% Minerva 5% Northacre, with Northacre able to earn up to 50% of the profits. Clues as to the actual amount Northacre will recive can be found in Minervas accounts, as they re value their trading property, and "book their share" twice a year. Northacres share of the pot so far stands in at £40M. Even on a poor day  The Lancaster appeas to be about to clear £200M, an outstanding amount. Minerva looks like clearing £120M and Northacre £80M. Northacre trades at 30p, all its shares at that price come to £8.5M

Is Northacre unloved for so long, about to have its day.?

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Northacre PLC is a holding company. The principal activity of its operating subsidiaries is property development, development management, and the provision of architectural and interior design services for residential property schemes. The Company's segments are development management, interior design, architectural design and sales agency commission. The Company's development projects include The Broadway, 1 Palace Street, 13&14 Vicarage Gate, Vicarage Gate House, Chester Square and 22 Prince Edward Mansions. The Company's subsidiaries include Waterloo Investments Limited, N Studio Limited, Northacre Development Management Services Limited, Northacre Capital (5) Limited, Northacre Capital (7) Limited, Lancaster Gate (Hyde Park) Limited and Nilsson Architects Limited. more »

LSE Price
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Mkt Cap (£m)
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26 Posts on this Thread show/hide all

harryr 2nd Jan '12 7 of 26

Knight Frank has just come out with its view for London prime in 2012, investors liked it. The Lancasters has now been built, to a standard not found elsewhere in our great city, flats are flying out of the door .Outside chance of a bid from another housebuilder after the Northacre plc name. Northacres next site is due to start in the spring, as a company they like to pre sell up to 50% even before the first sod has been dug.In todays maket that will not be hard to do. Northacres shares came to life last week, a trend that could last as investors sence the stock is undervalued.

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harryr 3rd Jan '12 8 of 26

Primelocation have a report out this morning showing London Prime asking prices at a new record high.

This is playing into the hands of Northacre as it is the only segment of the housing market that keeps out performing.

The Lancasters: Northacres flagship property on the very edge of Kensington Park looks like delivering profits unheard of by other housebuilders.

Since my remarks above under two years ago the market for London prime has moved up a thumping 34%.

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harryr 14th Jan '12 9 of 26
1

Northacre also has a profit share on another site in Kensington, that will be heard at the next planning meeting later this month.

This is for 42,000 SQ FT of new super prime.

A fact to note Northacre can make a super profit from the site, without putting any money into the scheme.

The above can been read in a company RNS from 2010.

The new updated planning is to remove the 50% low cost[rented] homes from this site and put them half a mile away on Camden hill.

I see from this mornings Financial times front page: Downgrades for France and Austria

A flood of cash is being dumped on the super prime London market,the rich have no safe home for their cash.

These properties, and the last 10% of the Lancasters not sold to date could be snapped up within weeks if foreign investor think their cash in the bank is about to be stolen from them in the form of defaults.

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harryr 19th Jan '12 10 of 26
1

UK 10 year gilts lowest for 300 years.

The super rich only have Govt bonds, Gold, or prime property to store their wealth.

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harryr 26th Feb '12 11 of 26


Good morning, Northacre is the builder, and the site is now build with around 88% sold.

Northacres profits look like they are going to be rather good.

Prices are infact up even more since the land was bought in 2006, with the budget selling price of just £1,300 a foot the going rate at the time.







Last updated at 5:39 PM on 25th February 2012



Views over Kensington Gardens and Hyde Park in central London have made Lancaster Gate the ‘best-performing street’ in the capital.

Properties on the two long terraces of the mid-19th Century development in Bayswater, to the north of the parks, have rocketed in value over the past three years to more than £3,000 per sq ft.

Boom time: While most of the housing market in Britain has stalled since the financial crisis began, the wealthy have continued to see their properties soar in value

This is about 125 per cent up on the 2008 price of £1,350


Read more: http://www.thisismoney.co.uk/money

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harryr 28th Feb '12 12 of 26

Since i first posted we have seen a non stop boom in London property.

Today the Eve Standard we tell you all about it.

The paper is free.

Northacre is the only pure prime. listed housebuilder.

It is about to start work on Vicarage Gate a site about 300 yds from kensington Place.

The Lancasters hit the headlines this week when research showed prices had risen 125% over the last 3 years, more than any other area in our great city.

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harryr 4th Mar '12 13 of 26

The Observer this morning:

It is a frenzy out there," says Tracy Kellett, a buying agent who searches London and the south-east for properties for her well-off clients. "I said prime London would go up 5% this year, but I think it is already up that much."

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harryr 5th Mar '12 14 of 26

This is a few lines from The Wall ST Journal found on the webt today , free to read, print in the morning.6th

'With the renovations completed in fall 2011, Northacre —the high-end property developer of which Mr. Nilsson is chairman and co-founder—has now sold 63 of the development's 77 apartments, raking in sales of £370 million. On top of building costs of roughly £115 million and the £67.2 million original price tag for the property, Northacre and its financial backers seem to have comfortably made a profit.

Yes they have made a profit, a very, very, large profit just as I wrote on the 17/07/2010 above.

Northacres shares do not reflect this news of profits and sales.





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harryr 23rd Mar '12 15 of 26

Accounts from Lancaster Gate[Hyde Park] ltd show a profit or £100M last year.

Northacre get 40% of this.

That is for just a tad over half the project.

No RNS but director buying .

Look at Northacres shares in issue x todays price.

Assets are now in the form of cash,within the J/V, way over its market cap.

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harryr 24th Mar '12 16 of 26
2

To sum it up:

The Lancasters J/V with Minerva has been a huge success.
The total costs all in came to just £230M, The site is finished.The first divi was based on this amount.See Northacre Home page under news Wall St Journal which puts costs to build even lower.
Total sales to date are £370M Northacre home page under News with loads more to come from the last plots that can be found on Rightmove, under New Homes Hyde Park.
Total profits will be the £96M made as of 30.06.11 Found in the J/V accounts plus the profit on all the sales from those accounts to date of at least £50M selling prices went through the roof.
We then get £146M.
One then has to add the value of the last 15% of the site as yet unsold .pure profit as costs were just £230 M for the project.
Add the lot up and Northacres shares are way undervalued.They pick up 40% of the J/V profits.


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harryr 2nd Apr '12 17 of 26

Today sees yet more director buying.

This is the third time in the last month.

Now that is what I call keen.

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harryr 7th Apr '12 18 of 26

Financial Times 07/04/2012

Analysis. Full page13

Door to a cloistered world

A full page of research on London prime.

The view on the street is that for all the reasons highlighted London prime has infact not even started its real long term rise.

The newspaper also states on other pages than the stamp duty rise has had no effect on prices or sales.

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harryr 2nd May '12 19 of 26

Investors might like to read the header at the top of the page.

Todays RNS says it all, just 11 flats to go and past sales of £370 million plus the last 3 just sold must now be around the £400M mark.

The last 11 should bring in another £75M.

Costs can be found under newspaper cuttings on the Northacres web Press page.

Looks like Northacre will clear £80M -£100M profit, a Large part of that is in cash within the J/V with Minerva.

At £100M Northacres stock would be worth 4 times todays buying price.

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harryr 4th May '12 20 of 26

RNS just out, Just picked up £3M with another £77M to come.!!
Market cap is tiny.

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harryr 7th May '12 21 of 26




Based on a conservative £200m total profit for joint venture

Profits between ....NTA share .......J/V profit ........NTA profit share

up to 10% ........ 5% ..............£22m ..............£1.1m

10-15% ............ 20% .............£15m ..............£3m

15-20% ............ 40% .............£15m ..............£6m

above 20% ......... 50% .............£148m .............£74m

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harryr 27th May '12 22 of 26

The last few weeks has seen real fear that it will be safe haven govt bond holders who may infact pick up the worlds debt bill.

Prime property is unlike stocks , bonds or gold, very little of it even less on the market at any one time

Just how do the worlds super rich keep hold of their nett worth in rough times ?

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harryr 30th May '12 23 of 26

RNS has just been put out to the market, £2M has been lopped of the debt and the borrowing cost just about halved plus cash for Working cap.

The new CEO is great guns here, he has only had the job for under 9 weeks..

No wonder he has been buying the shares no less than 3 times in as many months

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harryr 24th Jul '12 24 of 26

Results are out this AM.

Profit from its flagship site The Lancasters of over £42m

Company is going to pay a dividend after paying off the debt and some other bits.

Yield could come in over 100% of todays quote of £17m

London prime is firm.


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harryr 6th Sep '12 25 of 26

Director buy this lunchtime.

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harryr 21st Sep '12 26 of 26

RNS at market close.Profit from The Lancasters £51M after tax.Investors have seen a huge rise in profits and may well be jumping for joy. Northacre starts building its next site any day on land that cost peanuts 10 years ago.Next door to the Palace.

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