Lomond Capital set to become leader in lettings market
RESIDENTIAL lettings firm Lomond Capital has completed its fifth acquisition in Edinburgh and is preparing to sign off on a string of deals that will put it in the vanguard of the Glasgow market.
The company, chaired by law firm DLA Piper founder Roger Lane-Smith, has acquired the lettings division of Charles White, the oldest business operating in the sector in the capital.
The deal gives Lomond 700 extra properties, taking its portfolio to 2,500 and putting it on a par with the city’s biggest player, DJ Alexander.
The agreement follows hard on the heels of last month’s foray into Aberdeen, where Lomond acquired more than 900 properties through the purchase of Simpson Brebner and property manager KWAD.
Lomond chief executive Stuart Pender said further acquisitions were imminent, including deals that will vault the company to the forefront of the rental property markets in Glasgow and Manchester. He said Lomond would be a “key player” in both cities by the end of this year.
“We have got about ten deals at the offer stage, but beyond that there are about 20 discussions going on where we are acquiring information from other agencies,” Pender said. “Momentum on the acquisition side is building.”
In Scotland, many sellers are being driven by changes due on 13 November that will require tenants’ cash deposits to be held in a custodial scheme separate from the main accounts of the letting agent.
Meanwhile, the Scottish Government is abolishing the payment of upfront administration fees when a tenant rents a property. That change comes into effect from 30 November. The combined effect is putting a cash squeeze on many letting agencies, particularly the smaller operators.
“It is impossible to put an exact number on it, but what is being talked about in the market is that about 30 per cent of them will struggle to meet that deadline,” Pender said.
Against this wider backdrop, Lomond has taken on Charles White Lettings in a deal that will allow managing director Edwin Backler to continue expanding the Charles White factoring business.
Set up in 2010 with the aim of driving consolidation in the UK lettings market, Lomond Capital has earmarked about £45 million for the first phase of its strategy.
“That was a three to five-year plan and we are going to be ahead of plan in terms of how much we are spending,” Pender said. “Will we spend all of that money? Yes, and it will probably be done in closer to three years than five years.”
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Wednesday 19 June 2013
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