In the current bearish stock market conditions, some people will probably be looking at alternative forms of investments. Land banking might be one of those being considered. I have written a few posts on this topic before but thought I will post some updates following recent developments in the UK.
If you are thinking of buying UK land for investments, remember to look at both the upside as well the downside. The thing about alternative investments is that the exit strategy might not be clear should things go wrong.
Just yesterday, I was reviewing some documents released by the administrator of UK Land Investments (UKLI). If you have not been following the story, you can read more about it here: UK Land Investments Administration.
It was a real messy affair with many land owners trying to recover their money after the company was forced to shut down.
One interesting point that I picked up from the transcript of the meeting of creditors was that the current property market in UK was real bad it was very hard for developers to get any sort of financing. As a result, some developers were not even starting construction of projects on their existing land that had planning permission.
Given such conditions, it would appear that any successful planning permission and sellout would likely take many years.
Another thing worth reading for clients of UK Land Investments was an independent analysis of the UK land sold by UK Land Investments. Apparently, many of them had little or no chance of getting planning permission.
Despite all that is happening in UK, the owner of UK Land Investments, Baljinder Chohan, is still continuing his land banking sales in other countries, one of which is Dubai. He operates there under the company name of UK Capital Investments Group (UKCIG).
Dubai’s authorities are currently checking on UKCIG’s activities of selling plots in the UK.