At 17 floors high, and 201 residential apartments, the “Landmark” is set to be the tallest building in Derby City Centre. Sited on the car park on Phoenix Street, adjacent to St Alkmund’s Way, it will make a significant impact on the City skyline. The plan is waiting approval from the Government and UNESCO due its proximity to the Derwent Valley Mills World Heritage Site. This will require the skills of an experienced Property Developer who can ensure that the project will deliver on its promises.
Who is the Developer? Godwin Group, or more specifically GC No2 Ltd.
However, there is no corporate entity called “Godwin Group”. There is a collection of 56 small companies, the majority of which are dormant, 20 have been incorporated in the last 12 months and the combined net worth based on the last set of unaudited accounts is a NEGATIVE £1.8m! The notional, primary company went bust twice, and there is little evidence of any experience on projects of the size or nature of the Landmark building. The Managing Director, and 5 other key management personnel were appointed in the last 12 months.
Godwin Developments Ltd was incorporated on 7 April 2003 by Stuart and Stephen Pratt, together with their parents. By 24 February 2009 it had gone into administration owing £200,000; it was finally dissolved on 9 June 2011.
On 16 February 2009 a new company was formed called Godwin Developments UK Ltd. The last set of published accounts as at 31 August 2012 showed it had a net worth of a NEGATIVE £134,000. This was shortly after it changed its name to Niwdog Dev Ltd. By 5 August 2014 it had been dissolved and struck off the register at Companies House.
On 10 February 2012, Stuart and Stephen Pratt created Godwin Developments Limited Liability Partnership (LLP). On 18 February 2014, a letter was published by Companies House to strike this organisation from the register. This was subsequently withdrawn. On 10 January 2018 it changed its name to Grangewood Ventures LLP, and in the last 3 months, 2 additonal members were appointed – Featherstone Consulting Ltd (incorporated 5 November 2018) and Primary Properties (Midlands) Ltd (incorporated 9 January 2019) which are “front” companies for Stuart and Stephen Pratt.
Grangewood Ventures LLP has zero net worth.
On 24 June 2016 Godwin Property Holdings Ltd was incorporated by Stuart and Stephen Pratt together with business partners, Richard Johnston and Andrew Mitchell. On 11 February 2019 it changed its name to Godwin Development Holdings Ltd. The majority of the Godwin companies are “owned” by this organisation.
Although Godwin Development Holdings could be construed to be the Holding company for the group at 31 December 2017 ( it is cited on official paperwork), it had zero employees and a net worth of just £94 ( ninety four pounds)
A review of the accounts of the 56 companies reveals that 43 have assets and net worth of less than £1000. The majority of the net worth of NEGATIVE £1.8m is contained within Godwin Central Services Ltd – with £1.1m being lost in 2017 ( the last year reported on). The balance is from 2 legacy projects from 2011/12.
There is no evidence of a steady stream of profitable projects growing the companies strength over the last 15 years.
The Godwins website lists 12 Developments – the earliest one being completed in 2012 through to ones which refer just to future plans. This is presented as a complete list. One of the twelve is for a development on Agard Street in Derby for which planning permission was refused on 27 July 2018.
The remaining 11 projects are:
- 4 – where planning permission has been granted very recently – since October 2018. These are not delivered projects – Warstock Road (Lidl), Ram Jam Inn (fast food retail), Bletchley View (184 apartments) and The Landmark ( Derby)
- 2 – no planning permission – just “future ideas” – Kimbolton and Canal Street, Dudley
- 5 – completed, or in-progress:
- Brampton Hut Service Area. The Godwins website states:
- The site of just under two acres was acquired with an existing consent for a small fast food retail development. A new application was submitted successfully increasing the development size by over 50%.Leases to Burger King, Starbucks, Subway and Greggs were agreed off plan.
- The Site was purchased by Brampton Valley (Brampton Hut) Ltd for £1.2m on 21 October 2014. The leaseholds are between Brampton Valley and the various occupants.
- Brampton Valley is not a Godwins company.
- Motorway Services on-line stated “Additional land by the entrance to the existing was developed by Brampton Valley Ltd. during late 2016 and early 2017.”
- Pineham Neighbourhhod Retail Centre
- The land was acquired by Godwin (Pineham) Ltd on 30 June 2015. This company is 60% owned by Brampton Valley Pineham Ltd.
- 6100sq ft for a Nursery, and 6500 sq ft for 3 retail units
- Leases for 2 of the 4 units were agreed in November 2018
- Midland Road, Walsall
- This was a project to gain planning consent on a development which was then sold to Galliford Try for delivery
- Langley Mill, Nottingham
- Planning permission gained for a MacDonald’s restaurant in April 2012. Subsequently leased to the occupier
- Alexandra Park, Nottingham
- 15 luxury detached houses. All now sold
- Brampton Hut Service Area. The Godwins website states:
How is this the Landmark being funded?
According to Marketing Derby, the £30m Landmark project is “fully funded”.
It is not being funded from internal resources, or bank lending, but by a form of “crowdfunding”.
Godwin Capital No 2 Ltd ( incorporated 7 November 2016) has the purpose of obtaining funds – it raised £10m ( 9-11% returns over 2 years) through selling bonds to individuals. Godwin Capital No 7 Ltd (incorporated 7 December 2018) was set up to raise a further £20m offering improved rates of 10-12% over 2 years.
Independent financial advice states:
“As with any unregulated corporate bond, this investment is only suitable for sophisticated and/or high net worth investors who have a substantial existing portfolio and are prepared to risk 100% loss of their money. Any investment offering up to 10% per annum yields should be considered very high risk. As an individual security with a risk of total and permanent loss, Godwin Capital’s bonds are higher risk than a mainstream diversified stockmarket fund.”
From 7 February 2019 Godwin was launched on the ShareIn crowdfunding platform. This is being operated through Godwin Finance Ltd. They are also offering bonds – the risk warnings offered on the website are unequivocal.
“Bonds promoted by Godwin Finance Ltd are not listed or traded on any recognised exchange. This means you will not be able to easily sell your shares if you need to get your money back quickly.
YOU ARE NOT COVERED BY THE FINANCIAL SERVICES COMPENSATION SCHEME
Most of the companies in which Godwin invest are new companies with limited if any track record. These companies will provide information such as their business plan and financial forecasts. Please be warned that these documents are not guarantees that the relevant company can achieve what it is hoping to do. Equally the information provided may state certain facts and statements, and again please be warned that neither Godwin nor ShareIn are responsible for checking the accuracy of these facts and statements, which may not always prove to be true or complete”
The organisations that it describes as “new companies with limited if any track record” are Godwin companies, delivering Godwin projects where “….accuracy of these facts and statements, which may not always prove to be true or complete”
The Landmark project is due to start build in August 2019 with completion by February 2021 based on significant funding from private investors. In the Statement of Development Benefits, Godwins stated:
“To meet these challenging timescales Godwin have programmed concurrent negotiations but it should be noted that the PRS Asset Manager has committed to its investors that the deployment of its capital for regional cities outside of London, Manchester and Birmingham will start of by Q3 of 2019. If this does not take place then Godwin Developments would have to take the development back out to the market for funding”
This implies that key finance is not contracted which questions the assertion that the project is fully funded.
It has been reported that Godwins only choose projects that can provide a 30% return. Its financial history suggests that they make less than 0% return.
The various 2 year bonds used for financing the project will need paying back within the timescale of the build with ~10% interest. This implies that further financing will be required to fund repayments prior to the income being generated from the development. A risky financial model
When Derby City Council provides planning consent it does not assess whether the developer has the capability and the financial resources to deliver the project. The Council is only too pleased to promote any developer who can help solve the housing needs shortfall and provide necessary infrastructure. However, at times, due diligence, beyond strict planning processes must be necessary especially where projects will have such an impact on the appearance of the City Centre.
Godwins financial position, as per the last set of published accounts is very weak. Its project portfolio is not impressive – a few retail units and small housing developments does not indicate a robust track record for such a major undertaking. It has great ambitions to grow quickly which, whilst laudable, can bring huge cash flow problems – and Godwins does not have strong, inherent, positive cash flow.
There is a real risk that this could be a very tall, “white elephant” or a great project floored by unsubstantiated ambition.
Categories: Derby City Council