Shopping centre for price of a 3 bed semi

[msi]

https://www.bbc.co.uk/news/business-47130516

This sums up the problem with the financialisation of housing.  Capitalism is applying capital in a way to produce a return, so either the shopping center holding multiple businesses and employing many is deemed unworthy or it is a better application of capital to let out a 3 bed semi in the south east.

 

What makes me rage is from a Bank view the latter is preferred.  

 

I need a camomile tea to calm down.

[spyguy]

The centre, built in the 1980s, most recently changed hands for £10.3m in 2003, according to Estates Gazette.

[Tes Tickle]

I wonder if it's freehold, i.e. it owns the land?

If so then just board it up, give spray cans and marker pens to selected locals, leave it a year or so after which the council will give permission for pretty much anything to be built, then stack a hundred flats on the plot.

If it doesn't own the land then it's probably not worth what they paid for it, given that it's running at a loss and retail's never going to return to what it was in 1981.

Alternatively, they could just flog it to Portsmouth council as an investment for a few million.

[Wayward]

They were lucky to get £300K plus...its not really comparable to a semi.  Homebase was sold recently for £1.  I wouldn't compare Homebase to a packet of crisps.

[Captain Kirk]

13 hours ago, msi said:

What makes me rage is from a Bank view the latter is preferred.  

The banks know they have a better chance of getting bailed out because a collapse in property prices will affect the plebs, and the government will come to the rescue. That's the moral hazard of government and central bank policies aimed and inflating residential prices.

[Fromage Frais]

14 hours ago, msi said:

https://www.bbc.co.uk/news/business-47130516

This sums up the problem with the financialisation of housing.  Capitalism is applying capital in a way to produce a return, so either the shopping center holding multiple businesses and employing many is deemed unworthy or it is a better application of capital to let out a 3 bed semi in the south east.

 

What makes me rage is from a Bank view the latter is preferred.  

 

I need a camomile tea to calm down.

I think I have posted this before.

A few years ago I was near Chelsea and my wife saw a nice terraced house (no parking looked 4/5 bed).

got out rightmove and it was 15-20 million £ its a few years back now.

At the time I worked in a hotel with 80 rooms, 200 person function room 2 golf courses and turned around 6/7 million

At the time 8x net profit would mean the hotel was worth about the same money.

Just absolutely nuts

 

Edited February 6, 2019 by Fromage Frais

[Habeas Domus]

This is really about the ability of rates to inflate or deflate prices.

In areas of Central London low council tax helps to inflate prices.

In a failing shopping mall the business rates can deflate the value to the point where it is worth significantly less than undeveloped farmland.

Now if rates were regularly revalued to take into account the real market price of the property, these distortions would go away.

[monkeyman1974]

While the income is c £150,000; there is a net loss on the centre of c £200,000 pa; through things like unrecoverable service charge (due to void units) maintenance, rates etc.

The comparison with a house is as fatuous as with a bag of crisps; as per Wayward's comment.

The previous owner will be delighted to have rid itself of the asset; providing the purchaser completes.