THE dream of making a killing in the property market is commonplace these
days, and yet for most property investors it remains just that. Not for Paul
Roshan. At the tender age of 33, this half-Iranian, half-British property
developer has built the beginnings of a formidable empire, a portfolio of
some 25 properties spread across Kensington, Chelsea and Knightsbridge. And
Roshan is nothing if not ambitious. His aim, he says, is to do in rental
property what Candy & Candy has done in sales. “We want to build up our
name as having the best rental properties in London.” Some day he would also
quite like to buy West Ham United Football Club. But that’s one for the
future. In the meantime he is focusing on creating lavish, hotel-quality
apartments for London’s most affluent tenants.
Roshan has come a long way in a very short space of time. Fifteen years ago he
was selling paintings in Bermondsey Market, making roughly £200 a week. His
parents gave him £10,000 to put down as a deposit on his first property. “I
bought a shell in Tooting for £90,000,” he says. “I gradually refurbished it
over the next few years, using the money I was making at the market.” Three
years later he sold the property for £180,000. He reinvested his money in
another rundown property, refurbished it, sold it on — and continued in this
fashion for the next few years. To earn extra money, and to gain valuable
experience, he worked as project manager for an uncle who was renovating
family homes in Wandsworth.
By the age of 25, Roshan was ready to go it alone. Having started out
purchasing just one property a year, he became much more active, at first
making about four or five purchases a year. These days he can buy as many as
20 properties in a single year. He maintains a narrow geographical focus —
the “golden triangle” of Kensington, Chelsea and Knightsbridge — and is
aiming at the very top end of the market by refurbishing properties to a
high standard.
“The thing is to create a place that everybody wants,” Roshan says. “Affluent
people are used to the best, so that is what you have to provide. You need
to have the finest marble, the best wood and joinery; that kind of thing is
very important. Underfloor heating is essential too — no one wants
radiators any more.” Decorations and furnishings are lavish: these are not
homes for minimalists. Hallways are adorned with enormous glass chandeliers,
floors are Italian marble, the furnishings are leather and suede. Fittings
in the bathroom come from Alessi or Philippe Starck, kitchens have the
latest Siemens appliances. Coffee makers and champagne fridges come as
standard, as do all the very latest toys for the boys, from pop-up plasma
screens at the foot of the bed to I-merge CD systems and Sky+.
One of Roshan’s latest projects is 33 Lowndes Square, a sumptuously decorated
three-bedroom (3,050 sq ft) apartment within strolling distance of Harrods
and Harvey Nichols — and with volumes of wardrobe space in which to store
your purchases. Valued at £5.5 million, the property is available to let for
£6,500 a week and is a typical example of the kind of property Roshan’s
company, R&A Developments, offers.
Unlike Candy & Candy, Roshan’s investment strategy is to buy and hold
rather than to buy and sell, and so he has accumulated a portfolio worth
about £70 million. He admits that expanding that portfolio in the current
market is tricky. “It’s very difficult at the moment. Everything is very
expensive. But you will always find an agent who is selling a property and
who really doesn’t have a clue on the price — so you can always
pick a few properties up. But to create the margin you want, you have to set
the market, and that’s what we do.”
Getting the margins right is, of course, also a function of getting the money
right, and securing financing at this level is quite a different matter from
obtaining an ordinary buy-to-let mortgage. Jonathan Harris, Roshan’s broker
at Savills Private Finance, has worked closely with him for the past five
years, handling his development and investment finance. “There are only a
handful of lenders who will take on this level of refinancing, such as Bank
of Scotland Corporate Bank, Citigroup, Kaupthing Singer & Friendlander
and Barclays International,” Harris says. “I have close relationships with
these banks, which is crucial when it comes to getting the terms that Paul
requires.”
Development finance is secured to enable Roshan to carry out the necessary
refurbishment of the property. “At this level, banks tend to lend up to 85
per cent of purchase prices, plus the cost of developing the property,”
Harris explains. “Once the project has been completed, we refinance at up to
80 per cent of the end value. The reason for refinancing so quickly is to
obtain a cheaper rate of interest than on the development finance, as well
as releasing cash to pay the initial lender’s fee.” To keep the cost of
refurbishment down, Roshan has four different building teams, which he
prices against each to get the best value.
Roshan attributes his success over a relatively short period to knowing his
market inside out. “We know what people want,” he says. “We know that they
want every single luxury.
People who are renting at this level want to be treated as they would be in a
luxury hotel, only better.” But he warns prospective property developers —
particularly those attracted by the idea of making a lot of money very
quickly — that this is not a job for everyone. “There is a lot of stress,”
he says. “Every day you’re dealing with problems: people not turning up on
time, people not turning up at all — it’s not like a normal
nine-to-five job. This is something where you don’t know how much money
you’re going to make at the end of if, and you’re in a situation where the
property market could crash, so you’re taking on a lot of risk.” But the
rewards, he concedes, “are very good”.
R&A Developments, www.radevelopments.co.uk; Savills Private Finance, 0870 9007762
