We’ll fight them on the brown field sites
Posted on December 11, 2007 by Richard Beddard
Filed Under Companies |
Judging by the cover of its annual report, there’s little doubt Inland (INL) is at odds with the UK planning system. This bloodthirsty cartoon adorns it, and the enemy (many of them beheaded and disembodied) are councillors.
Inland’s buying up land to sell on with planning permission to property developers, and, as so often happens, its price has fallen since April when it floated. If the price falls much further the shares be cheaper than the per share value of the company’s net assets.
It’s easy to imagine uncertainty about the housing market weighing on Inland’s share price but Britain is, we’re repeatedly told, a small island and land is in short supply so there’s room for optimism too. Its chief executive and finance director bought 50,000 shares each recently at about 46p, above the yesterday’s close of 41.5p.
As for its chairman, I’m not sure if the king in the cartoon is an accurate likeness. It could be…
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2 Responses to “We’ll fight them on the brown field sites”
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The lack of land in Britain is a result of planning laws, not a physical shortage.
If the government loosens planning laws (which does not seem that unlikely) this company would be faced with a worse outlook for prices in general, and a lower premium on having planning permission.
I am also not sure I have a clear understanding of why the business model works. Why do developers not buy this land and get planning permission themselves? Why would the current owner not be able to get planning permission themselves? How much land is there on which one can get planning permission, but for which the current owner (for some reason) cannot do so before selling?
I am not saying it is not a buy, just that this type of business model makes me a little uncomfortable as to its sustainability. I also fear political risk because it is so unpredictable.
Hi Graeme, thanks for your comment.
You may well be right, it certainly explains why Inland seems to be enjoying the battle with the planners.