Kentish Property comes to market
Kentish Property Group is coming to market on the crest of a wave of interest in anything to do with inner-city renewal in general or Docklands in particular.
Kentish was effectively taken over by Keith and Kay Preston in 1980 when they acquired the voting shares, a move which was consolidated last year when they obtained the remainder of the shares. It has been used as a vehicle for the Prestons’ inner-city developments after a dull and difficult period in the 1970s when, as a small Kentish housebuilder, it incurred considerable losses.
Since the Prestons moved in, profits have rocketed from £35,000 in 1982 to £1.2m last year. The real fun is coming this year, however, with profits jumping to a forecast £3.4m before tax.
The profits impetus is coming from soaring London property prices coinciding with the coming on stream of two major Kentish residential developments, Watermint Quay and Cascades, the Isle of Dogs tower.
Watermint Quay, in Hackney, consists of 77 three-and four-bedroom terraced houses, 28 flats, 12 boat stores and two shops. The houses are selling at between £105,000 and £121,000, the flats between £56,000 and £71,000. All the houses and flats have been presold before completion of construction, and all sales are expected to be completed in the current year.
At Cascades, Kentish has sold all the 160 flats so far released, but only 40 of them will be completed in the current year. This means that profits from that development will be spread over several years.
The spreading of profits from Cascades will be of some comfort to analysts, who are inclined to say that developers are only as good as their last deal and that profits of the past cannot be guaranteed in the future.
Kentish does have a number of new schemes coming through the planning and pre-development stages, and has the option of selling sites on to other developers if it wishes to quicken the profits pace.
At the placing price of 185p, the shares are on offer at 14.8 times, but few outsiders will get a look in at that level. Most of the 4.95m shares being placed have gone to clients of the brokers concerned, Panmure Gordon. A quarter of them went to Robert Fleming as the second distributor required by the Stock Exchange rules.
But if the shares can be picked up at anywhere near the placing price, investors will go for them.
