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Jardin Smith International

Last Saturday, I was invited to a exhibition held by Jardin Smith International, a local company that sells UK land to investors in Singapore and other countries. Jardin Smith International holds these kinds of events quite frequently, each time at a different venue. In my case, it was held at Ritz Carlton Hotel. I have not been to Ritz before, so it took me a while to find the place.

Upon arrival, I was greeted by a client relationship manager (or salesperson), whose job was to make me feel comfortable and explain to me the concept of how it all works. So I was treated to some free food and there was the usual idle talk before we got down into business.

Having already been to a presentation by another company that sells UK land, I was familiar with the concept. Here’s how it works:

  1. The company purchases a plot of greenbelt land. This is land that cannot be developed unless it is rezoned (a process known as getting planning permission) by the government.
  2. The land is sub-divided into many smaller plots and sold to investors.
  3. The company retains 25% of the land so that it is also “vested” along with the investors.
  4. The company goes out to apply for planning permission. This process will take many years. As such, this is more of a long term investment. We are told this would take five to ten years at the minimum.
  5. Once planning permission is obtained, the value of the land will rise 5-10 times (from your purchase price) and you can realise your gains when the entire site is sold. In Jardin Smith International’s case, 60% of the owners will have to agree before it can be sold.

The reasons why we should investing in UK land (as told by the company) are as follows:

  • UK has a housing problem and land will only become lesser and lesser.
  • The price of land has been increasing steadily (About 20-fold in the last 15 years).
  • 2012 Summer Olympics will be held in London and this will have positive effect on the property market.

The plot on offer by Jardin was being sold for a cool $30,000. An initial deposit of 10% was required and could be paid by credit card. The balance could be paid by credit card and UOB cardholders could even pay by interest-free 12 months installment plans.

I politely told the client relationship manager that I didn’t have the money at the moment and wasn’t interested. She was quite persistent and even suggested I just pay the deposit first. I wasn’t going to do that since I won’t be able to finance the remaining 90%. She was pretty disappointed and made a last ditch effort to ask me for referrals. Of course I would not refer any of my friends to a company that I had not fully researched on.

Tomorrow, I will write about some of the things you need to be aware of if you are investing in UK land.
See also Dangers of UK Land Banking.

Besides the land investment, there was also a side booth promoting a property City House, Croydon in London. According to the person I spoke to, he was helping some investment fund sell off their units.

1-bedroom units were available for about 215,000 GBP and 2-bedroom units for 250,000 GBP. 12% of the amount would be payable within 28 days, another 13% due at completion (end 2009) and the remaining 75% can be bank financed by Lloyds.

The rental yields are estimated at 5% and if the units are rental out, it would be able to cover the interest payments. It looked interesting to me but being not very inexperienced in this area (other than the fact that I can’t really afford it now), I decided to give it a miss.

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332 comments
harry says a few months ago

This is a known scam in the UK. The Government of UK has already posted warning in the FCA website. Just google LAND BANKING SCAM. My Sister in Law bought a few lots. To her horror, she can’t sell it. And there is absolutely no way a piece of agricultural land would cost her SGD20 per sq ft. I could have found a similar piece of land at 1/20th of the price she paid for. Being an Englishman, i know she has been take for a ride. There is virtually no secondary market.she is now the proud but foolish owner of some tiny plots of land that has no potential whatever. Biggest oopsie of her her adult life. Well, we learn, don’t we.
STAY AWAY

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Chee Chong says last year

Weekend of 25 and 26 April.
One Utama, Level C, Maple and Cyprus. Lunch – no proper seating. Poor hospitality.
Don’t be fooled by parking validation – RM5 still a hefty fee for 2 hours stay. Should have been free.
9th green belt land investment scheme. Eaton Bray. No success story yet. All still waiting for planning permission approval.
SPA is with CT Choo of Unit B-5-6, Wisma Pantai, No. 5, Jalan 4/83a, Off Jalan Pantai Baharu, Bangsar 59100 Kuala Lumpur 03-22832373 [email protected], lawyer Choo Chin Thye.
No prospectus given, just a powerpoint presentation. Maybe prospectus given after signing of SPA.
Not sure whether JSI is licensed, nor if the land investment scheme is in Malaysia. No information offered anyway.
RM63 per sq ft. One plot 100sq m. 2 plots about RM136k.
Jardin Smith bought at about RM30+ per sq ft. Jardin Smith seeking profit here and now from their purchase of agricultural land.
Subsequent profit is very much bonus. This is the very profit Jardin Smith is asking investors to believe in. Jardin Smith already profitted if investors pay Jardin Smith, by making a huge margin from flipping the land sale to investors.
Anlaby is not one of the greenbelt investment schemes. And the margin was there was only “50%” not 6.5 ROI represented for Eaton Bray. So, Anlaby is not a precedent.
A number of Chinese investors – probably encouraged by the representations of huge profits and not that the value of investment is not too big to risk.
40% sell back to JSI. But have not added fees and costs which would reduce this to even much lesser.
Big bet is on UK government and local council allowing the land conversion. Big if as things stand.
So what is happening is investors buying land from JSI, and riding on the possible big return if and when land is converted.
Feel lucky did not invest.
Didn’t feel sad JSI did not honour the RM100 Jusco voucher offered.

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