AMA hails home sales turnaround

MIKE Afshar, managing director of high-end housebuilder AMA, says the “sun is coming out” as the family-owned firm pushes ahead with developing a health village concept and sales of its discounted flats experience a small “flurry” of sales.

Mike Afshar: 'our innovative work has turned around AMA'. Picture: TSPL

But Afshar, one of three brothers involved with AMA, dismissed fears that government schemes such as Help to Buy are causing a property bubble as “scaremongering”.

Along with the UK’s larger housebuilders such as Barratt, Persimmon and Taylor Wimpey, niche Edinburgh-based AMA has enjoyed a recent resurgence in sales of homes.

Afshar said 11 of the 16 flats being built in Marchmont, Edinburgh, which are due to be completed in March next year, were sold off-plan.

Five further new flats at the firm’s site in Cramond, Edinburgh, which are being marketed by Strutt & Parker, are also selling well.

He said: “At Cramond we opened a show flat at the end of May. The first five we released were sold and we have released another five.”

AMA bought the 33-acre Cramond site in 2002. The company is pressing ahead with ambitious plans that include a sports academy, care home and physiotherapy centre in addition to more than 80 flats and luxury villas.

Afshar said the company is still in discussion with “stakeholders” to take over the running of the sports facilities – which could be a new centre in Edinburgh for cricket, football or tennis – as well as operators for the care home and the health clinic.

Turnover at AMA rose to £17 million in the year to 31 October, up significantly from £5.9m in the prior year.

The company was in the black to the tune of £1.8m at the operating level, but lost £313,157 at the pre-tax level due to writedowns on its assets.

Afshar said: “We basically had to take a realistic look at the market and selling price per unit, where we reduced margins but still make profit.

“Through our innovative work, we have turned around the company.”

He added that, in more recent trading, the firm has continued to reduce its debt “significantly”.

The sales at Cramond had a “huge” significance, he added, after years of struggle for the firm. At the height of the crash, AMA was involved with a joint venture in Edinburgh’s Fountainbridge area with Grosvenor Estates and the Royal Bank of Scotland.

The joint venture at the massive housing development on the site of a former brewery, known as Springside, was unpicked as housing sales ground to a halt during the banking crisis. Afshar said the company instead had to think creatively in an effort to secure sales.

AMA developed 140 of the flats as “apart-hotels”, under the management of Dublin-based serviced apartment operator StayCity.

“That was a major change of direction,” Afshar said. “We sold 40 units to private investors, a further 60 to a pension fund and the reminder of the last phase has again been sold to private investors.

“The whole point was to think out of the box and bring in revenue to the company, and that has got appeal to investors.”

He admitted that the firm’s site on Slateford Road, Edinburgh, had been bought at the “top of the market” and has had to be switched from a residential scheme into student residences. The firm has since signed a lease with Edinburgh Napier University to take 255 units.

“Any movement in the market is a positive from our point of view,” he said. “The demand is there but we need support in order to stimulate the market. This whole idea of the bubble bursting again is scaremongering.”