Liverpool Daily Post - May 2007
Property Group in £3m Deal
Liverpool based Ethel Austin Property Group (EAPG) has announced a deal to sell its Travelodge Hereford development to the Merchant Place Syndicate for £3.3m.
EAPG, with joint venture partner, Regal, completed work on the 52-bedroom Travelodge at Pomona Place, Hereford in January.
The partnership is now under way with the second phase of development - this will include the creation of 1,800 sq ft of retail space and the construction of 7,000 sq ft of residential apartments.
Andrew Lovelady, financial director of EAPG said "The development in Hereford should prove an excellent investment for the Merchant Place Syndicate. EAPG intends to invest the profits from this sale into some landmark projects we have planned in Liverpool and the surrounding area.
Property Week - November 2006
Austin Power
There aren't many places where original Lowry works sit cheek by jowl with gun dog trophies and a signed Michael Vaughan shirt but the Ethel Austin Properties office has all of these gems.
Nestled above a Spanish restaurant on Liverpool's North John Street, it is the unassuming centre of an investmet force that has £675m of assets under its management as well as 200 joint venture companies with more than 50 partners.
On the boardroom wall is a portrait of the late Ron Austin, whose mother, Ethel, founded the eponymous fashion retailer in the 1930's. The property company separated from the retailer, which was sold in 2003, and invests on behalf of the Austin and Owen families.
Traditionally, Ethel Austin Properties has shied away from publicity. However, financial director Andrew Lovelady agreed to talk to Property Week about the company and its investment portfolio.
Lovelady says the reason the company was persuaded to be interviewed was a matter of setting the record straight. "People always assume we're part of the retail business" he says. "The other thing is that we're part of joint ventures that a lot has been written about. We've been happy for them to have the limelight but it was felt we needed to balance it slightly.
Liverpool is enjoying a property boom and plenty of media attention at the moment. Ethel Austin has partnerships with the likes of Beetham Organisation, Vermont and Arrowcroft in high profile schemes such as the mixed-use £100m Sefton Street Quarter.
"There's technically no such thing as the Ethel Austin Property Group - there are two groups" says Lovelady. "One is owned by the Austin family, the other by the Austin and Owen families". However, no distinction is made when talking about the strategy and assets.
In the market, the extent of Ethel Austin's assets is not fully known. Chris Lloyd, associat director at DTZ says he suspects the portfolio is a lot bigger than people imagine. Rather than dynamic, he says the company is seen as 'shrewd and understated'.
In the September 2005 accounts, the group had £156m net asset value and it now has £675m of gross assets under management. This figure includes the joint venture partners' share and debt. When Lovelady joined the company in 2001, the gross assets under management amounted to £210m.
Barry Owen and Lovelady are executive directors and sit on the board with two non-executives. There is no chief executive. Reading between the lines, it seems that the increase in activity coincided with the death of Ron Austin in 2000. "I joined at a time where the market was right to go out and acquire. Historically, we'd been a fairly conservative organisation" says Lovelady.
Social Work
Lovelady joined from insurance brokers Griffiths & Armour where he was group finance director. In his spare time he is a Methodist minister and is heavily involved with the voluntary and community sector.
The Austin family, says Lovelady put their trust in Owen to make decisions after the death of Ron Austin. "It happened to be when there was a great expansion in property" he says.
"We geared up and expanded the business by getting in with people like Beetham and Vermont and expanding our other joint venture partnerships.
Ethel Austin Properties has assets all over the UK and abroad, and it doesn't have to go out and look for them. Owen has an extensive network of contacts in the industry built up since the 1960's.
"We don't go out there actively seeking joint venture partners" says Lovelady. "We have long-established joint venture partners and, more often than not, they bring deals that they think we'll be interested in".
In return, Lovelady says, the partners get the secruity of Ethel Austin's support and experience. "We bring a certain gravitas to a deal in terms of finance" he says. "Barry Owen can pick up the phone to the head of of every major clearing bank in the UK".
The most important ingredient from Ethel Austin point of view is the people. "We want to be in business with people we like and we want to go on and have a long-term relationship with them" says Lovelady. "We're not interested in doing business with people who want to be in and out. We have partners who've been partners for 20 years or more".
Vermont chief executive, Mark Connor, has known the company for about 10 years, having first worked together on a property deal in Congleton. "As a company it is happy to maintain a low profile and never seek plaudits, but we perceive it as a very substantial regional player whose growth now registers on the national scale" he says. "You also feel it brings great credibility to the table when you are meeting banks and vendors to discuss proposals.
Independence Day
Barry Owen is also chairman of Liverpool agency stalwart Mason Owen. "We have to be careful that Mason Owen is seen to be (and is) completely independent of Ethel Austin Property Group" says Lovelady. "Mason Owen has a lot of other clients. Its sole purpose is not to serve (us).
The group prides itself on knowing the nortwest inside out, although it has few holdings in Manchester, instead preferring Merseyside and North Wales.
It is ready to take advantage of unexpected opportunities, such as buying Westmorland Shopping Centre in Kendal during the foot-and-mouth crisis, when the Lake District was badly hit. Westmorland was bought from the Shell Pension Trust for £14.8m in a joint venture with Trinity Development Company in 2002.
The group has two other key shopping centre holdings: the Rookery Shopping Centre in Newmarket, which it bought for £17m from Prime Commercial Properties in 2004 with the Active Retail Fund; and the Castle Centre in Antrim, Northern Ireland, purchased in May last year with a private individual for an undisclosed sum.
Because of the history of the group, a lot of its holdings are secondary retail units. Despite the gloomy predictions in the mainstream press, it is not panic-selling.
"We're still a great believer in the British high street - we own half of Llandudno's high street" says Lovelady. He cites Grosvenor's vast Liverpool One scheme as an example of confidence in retail not being misplaced. "We're not in for the short term on anything. We've been around for 35 years and hopefully we'll be around for at least another 35".
Ethel Austin recently sold 101 Old Hall Street in Liverpool to Henderson Warburg for £39m, reflecting a net initial yield close to 5%. It is in a joint venture with Arrowcroft and Faircroft to refurbish Yorkshire House, a 25,00 sq ft (2,322 sq m) office building next to Unity in Liverpool City Centre, and has a partnership with Dransfield Properties to regenerate the centre of Morpeth in Northumberland, which will have an estimated completion value of £50m.
Its largest development scheme is the Sefton Street Quarter with Vermont, where an industrial site will be transformed into a mixed-use development with a luxury hotel, 30,000 sq ft (2,787 sq m) of commercial and leisure space and a 220-storey residential tower.
The activities of Ethel Austin's largely private individual joint venture partners have led it to investments in the US, Canada, Spain, Portugal and a potential venture in New Zealand.
A foray into Poland is now on the cards.
Lovelady says there are no overall return targets that must be met by the group.
"Our strategy is to ensure the continuing measured growth of the business and our continuing stewardship of our shareholders' funds" he says. "We tend to look after the interests of the family".
Liverpool Daily Post - January 2005
EAPG Consolidates
Ethel Austin Property Group yesterday said it had completed a financial consolidation with Bank of Scotland Corporate and Royal Bank of Scotland totalling £129m.
Around 270 properits owned by its two divisions - Ethel Austin Investment Properties and Ethel Austin Properties Holdings - were involved.
The consolidaiton move will enable the group to repay loans to 11 lending institutions and will provide it with a solid financial platform for further strategic acquisitions in the future. EAPG was advised by property and banking lawyers Michael Stephens and Michael Jones from Hill Dickinson in Liverpool.
Executives fro Kerr & Co of Glasgow acted for the company in relation to properties based in Scotland.