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Investors may like ground rents but are the creators of these investments – the house builders – fully exploiting this source of revenue?

Landmark Investments Group, a specialist investor, believes residential developers are missing out on a potential £300m profit a year. This is based on the industry’s £19bn turnover, a £200,000 average sale price and average annual ground rents of £250.

Bolton-based Landmark acts for many leading house builders and has spent the past decade buying, selling and managing ground rents. The group plans to spend £30m on stock in 2010. Director Mark Hawthorn claims that many developers do not consider the value of selling or collecting ground rents from their properties, which is “almost all profit”. Hawthorn says, “Considering the market conditions over the last couple of years, ground rent sales could be a welcome and significant addition to profits, especially for house builders with large-scale apartment developments.”

Joint developers Countryside Properties and Taylor Wimpey were the beneficiaries last year when they sold 1,095 ground rents in their Greenwich Millennium Village in south-east London. The ground rents produce £200,195 in Annual income and the sale reflect a yield of 6.5%. The house builders pocketed £3.1m.

Mark Hawthorn, director of Bolton based Landmark Investments Group, is launching a campaign to raise awareness to residential developers about potential profits in their end of year sales results.

Hawthorn is warning developers they do not consider the value of selling or collecting ground rents from their properties, which he says “is almost all profit”, when posting end of year results causing them to miss out because they don’t act quickly enough.

Landmark Investments Group’s research shows that of the largest 20 developers in the Country, whose combined turnover exceeds £19bn, over two thirds have end of year results due in the next six months. The company said that legal notices required in selling ground rents alone take eight weeks to complete, which is before any contract can be sent, meaning action needs to be taken now to secure the extra profits for 2009-2010.

Hawthorn comments: “Considering the market conditions over the last couple of years, ground rent sales could be a welcome and significant addition to profits, expecially for housebuilders with large scale apartment developments. We are approached all to often by developers who need to sell ground rents quickly for their yeaer-end sales only to have to inform them that it is not legally possible this late in the day. We want to raise awareness of the potential profit and urge developers to act now if they do not want to miss out.

We can assist with serving notices as well as the management of ground rents and sites isn teh run up to sales. In many cases, are able to do this free of charge.”

Hawthorn believes that residential developers are failing to record a potential £300m profit in their end of year sales results based on a £19bn turnover, with £200,000 average sale price where 80% of units have ground rent attached at £250pa.

Landmark Investments Group which is now in its tenth year purchasing, selling and managing ground rents, acts on behalf of developers and housebuilders as well as charities, trusts and pension funds. At the beginning of this year, the firm announced targets to spend £30m in 2010 with a primary focus on ground rent contracts in the North West and London.

“This year poses a fantastic opportunity for us to pick up a lot of available stock and further enhance our profile”.

IN our series of interviews with top professionals from across the property sector, TheBusinessDesk catches up with Mark Hawthorn, owner of Bolton-based ground rent investment company Landmark Investments Group.

What are your views of the current state of the commercial property and property development markets?

Although we are hearing regular reasonably positive reports on prices we are also witnessing a number of companies admitting they have issues and are struggling. It appears to be more of a case that we have become blind to the bad news and seize upon the good.

Overall things appear to be getting slightly better which is about as much as can be expected after the position the world got itself in. The large residential developers seem to have weathered the storm and many are back looking for land and resuming sites.

What key challenges and pieces of legislation do you think will most affect your sector over the coming months?

Our biggest challenge continues to be that we have a massive imbalance between the amount of deals we are able to produce against the amount of finance being made available.

Our banks are 110% behind us and continue to lend but after events of the last three years they have lost a lot of jurisdiction to computer autonomy or new emergency government guidelines.

Why do you think the North West is a good place to work?

The North West is considered second only to London as a place to be based and do business.

There have been massive developments over the last 10 to 15 years and, even now, there continues to be major projects such as Media City, Wirral Waters and Ocean Gateway.

I am in London regularly on business and we have a clear advantage on costs and ease of movement. I can leave home in Bolton and be at Euston station in under 2 and a half hours.

What is your favourite building in the North West and why?

I would have to say The Trafford Centre simply because I am aware of the sheer effort that not only went into the planning, one of the longest and most expensive ever, and subsequent development but also the continual development of the site.

Additional development has included the Great Hall, Barton Arcade and John Lewis. The main development itself is around 12 years old but is still in pristine condition and busier than ever.

If you could improve anything in the region, what would it be?

Further investment and development. Although Manchester and Liverpool Centres have benefitted from massive redevelopment there are still areas within these cities, as well as swathes of other large towns, in need of massive regeneration.

There have been attempts, some very successful, others less so, but there is still a long way to go.

What is the best piece of advice you’ve ever been given?

I have always been a believer in working smarter as opposed to harder. This is not to say I am lazy of course!

I regularly see people who are capable of so much becoming involved in typing letters, answering phones, accounting etc when they could be making money.

Once I was in a position to recruit staff the ability to leverage theirs and my time to suit what we are all best at has reaped real rewards.

And the worst?

“Trust me” I have always found, to my detriment, that the more trustworthy somebody tells me they are the more likely they are to be the opposite. The many people we deal with who are both trustworthy and honest have never felt the need to tell us they are.

Landmark Investments Group, the Bolton based ground rent management and investment company, has increased its national ground rent portfolio with the purchase of 40 residential units in St Austell, Cornwall, from Wombwell Homes. The purchase adds £5m to its insurance portfolio, which has grown 40 per cent in the first quarter of the year. Landmark expects to manage policies with rebuild values of more than £100m within four months.

Landmark Investments, the Bolton-based ground rent investment and management specialist has said it plans to buy ground rents worth £30 m this year.

The business, founded by Mark Hawthorn, said it had recently confirmed the financial support of its banks and syndicated investors and planned to step up investments levels.

Landmark will focus on property assets in the North West, London and in other major cities.

He said œwith the Governments Kickstart Initiative and funding slowly being released back to the property industry, this year poses a fantastic opportunity for us to pick up a lot of the available stock and further enhance our profile.

Bolton based property firm Landmark Investments is planning to buy £30m worth of ground rents across the UK this year.

The company has grown its management team and said the financial support of its banks and syndicated investors should enable those business targets to be met.

Mark Hawthorn, owner and director of the firm, said he expected around £450m of new pipeline stock would become available this year and he wanted Landmark to secure at least 10,000 units, and will focus on all major UK cities.

With funding slowly being released back to the property industry, this year poses a fantastic opportunity for us to pick up a lot of available stock. We can benefit developers and housebuilders by adding value to their assets that, in some cases, they never knew existed.

Even recently, a lock of internal resources and management expertise has left some developers with no choice but to forego the additional value and profit they can gain.

Bolton based Landmark Investments Group has said it aims to purchase £30 m worth of ground rents nationwide.

As Landmark approaches its ten year anniversary, the group has confirmed the financial support of its banks and syndicated investors, which will enable its business targets to be met.

Owner and director Mark Hawthorn predicts £450m, based on 120,000 units with 90% being leasehold at £250 per annum average each, of new pipeline stock will become available this year and aims to secure at least 10,000 units.

Within Landmark's ground rent guide, it said a ground rent charge can range from £100 - £500 per annum as an average. Although it will be concentrating on the North West market, Landmark Investments Group also continues to expand in London and the South as well as targeting larger blocks in all major cities.

Mark Hawthorn of Landmark Investments Group said, With the Government's Kickstart Initiative and funding slowly being released back to the property industry, this year poses a fantastic opportunity for us to pick up a lot of the available stock and further enhance our profile. We can benefit dev elopers and housebuilders by adding value to their assets that, in some cases, they never knew existed.

Even recently, a lock of internal resources and management expertise has left some developers with no choice but to forego the additional value and profit they can gain. We're excited about assisting them out of a stagnant market and demonstrating the true value of ground rents on their developments.

Landmark Investments Group, the Bolton based investment specialist, has declared its intentions to purchase £30m of ground rents nationwide.

Approaching its ten year anniversary, Landmark has recently grown its management team and confirmed the financial support of its banks and syndicated investors as it looks to buy in the North West and South. Owner-director Mark Hawthorn said This year poses a fantastic opportunity for us to pick up a lot of available stock and further enhance our profile.

Ground rents investment and management specialist Landmark Investments Group is focuong on the North West, London and the South as it embarks on a major growth drive.

Landmark, run by Mark Hawthorn, currently has a portfolio of around £5m and has contracts for a further £2m at sites due for completion in the near future.

It is also awaiting to exchange on another £3m of stock.

The firm is looking to grow its portfolio to £30m this year. It is offered an average of £2m new stock each week.

Landmark has expanded its management team and has secured the support of its banks and investors for its ambitious plan.

Mr Hawthorn said he expects £450m of leasehold rents to become available nationwide this year as housebuilding sector activity is stepped up and the Government's Kickstart programme to revive stalled schemes begins to bear fruit.

This year poses a fantastic opportunity for us to pick up a lot of available stock and further enhance our profile.