Friday 14 January, 8.30am, Baltic Room: a zinger of an idea to kick off 2022. GBH’s tack-sharp fund originators have figured a way to make a bundle from Grenfell-blighted blocks, now Gove is promising to pay to replace cladding.
Tens of thousands of the flats are worth zip all – until the repairs are done and certified by an army of box-ticking experts. Except there is no army. So, it’s all going to take years. Trick is to find investors renting out blighted units who can’t wait a decade. Or highly distressed owner-occupiers who need money now.
Our resi dept begins the hunt next week. Plan is to offer 60% to 70% of the unblighted value. Team P’s job is to sell the idea to investors. “Take a gander at the returns,” I say, pointing to a spreadsheet provided by GBH Investment Management. “They show an ungeared 14% IRR over seven years.”
I shove PowerPoint print-outs covered with little red Monopoly houses across the table. “Look, if the fund buys £500m of flats using £300m of equity and £200m of debt, the cap value could be £850m to £1bn by 2030. What’s not to like?”
“Everything,” says Posh Girl, after a long silence. “Taking advantage of the plight of others is just not right.”
What is wrong with people in this industry nowadays?