FAO GY

[ty cobb]

http://news.bbc.co.uk/1/hi/business/7534052.stm

Are you glad the club didn't invest in some houses 6 months ago - the balance sheet would have taken somewhat of a hit.

Building flats on stadium land would also be somewhat of a risk currently I think - the demand is still out there in Oxford for homes/flats but at current prices people just can't afford them (compare average salary in Oxford to average house price) and are no longer able to get stupid credit to stretch themselves.

The renting market in this area is also likely to be weak - students aren't going to want to come out here and the proximity of Blackbird Leys means your average professional wouldn't be that keen either.

So how about some flats the council could buy - might work they are short, but do we really want a load of council flats in each corner of our ground?

However, give it 3 seasons when we're in league 1, mortgage markets are allowing lending again and inflation of 4% has made £13 million considerably cheaper then it is today then it looks a bit of a nicer purchase price.

[Mally]

http://news.bbc.co.uk/1/hi/business/7534052.stm

Are you glad the club didn't invest in some houses 6 months ago - the balance sheet would have taken somewhat of a hit.

Building flats on stadium land would also be somewhat of a risk currently I think - the demand is still out there in Oxford for homes/flats but at current prices people just can't afford them (compare average salary in Oxford to average house price) and are no longer able to get stupid credit to stretch themselves.

The renting market in this area is also likely to be weak - students aren't going to want to come out here and the proximity of Blackbird Leys means your average professional wouldn't be that keen either.

So how about some flats the council could buy - might work they are short, but do we really want a load of council flats in each corner of our ground?

However, give it 3 seasons when we're in league 1, mortgage markets are allowing lending again and inflation of 4% has made £13 million considerably cheaper then it is today then it looks a bit of a nicer purchase price.

I can't see the club or anybody getting planning permission for residential use on the stadium site. The permission across the road means it's even more unlikely now.

Kassam will make sure that there are covenants on the stadium, should he sell it, that preclude leisure uses that compete with his development across the car park so the only real option is commercial use which has much lower land values and anyway the location is all wrong. I think the plan to fund the purchase of the stadium via a development deal with a partner is dead in the water.

[GodalmingYellow]

http://news.bbc.co.uk/1/hi/business/7534052.stm

Are you glad the club didn't invest in some houses 6 months ago - the balance sheet would have taken somewhat of a hit.

Building flats on stadium land would also be somewhat of a risk currently I think - the demand is still out there in Oxford for homes/flats but at current prices people just can't afford them (compare average salary in Oxford to average house price) and are no longer able to get stupid credit to stretch themselves.

The renting market in this area is also likely to be weak - students aren't going to want to come out here and the proximity of Blackbird Leys means your average professional wouldn't be that keen either.

So how about some flats the council could buy - might work they are short, but do we really want a load of council flats in each corner of our ground?

However, give it 3 seasons when we're in league 1, mortgage markets are allowing lending again and inflation of 4% has made £13 million considerably cheaper then it is today then it looks a bit of a nicer purchase price.

There seems to be about 4 or 5 largely unrelated arguments through that post.

No, I'm not glad that the club didn't invest in housing stock to house players.

No, the balance sheet would not have taken a hit.

I agree that the option of financing the stadium company purchase and completion, by building flats in the stadium corners is unlikely to yield sufficient profit to make the scheme workable at present.

The renting market is not weak. It has gone sky high (so I am told). I know letting agents in my area and in the Oxford area and they are all reporting substantial increases in the letting market, because obtaining high finance to purchase price mortgages have all but gone, yet people still have to live somewhere so renting is their only option.

I can see no benefit of building council flats in the stadium corners, financially or otherwise.

If we get to the Championship in 3 years, which is exceptionally unlikely, the £13m price tag on the stadium will still be way too high, unless the conference centre business is improved very rapidly. All the signs are that conference business is falling not increasing, so that is unlikely too.

[GodalmingYellow]

http://news.bbc.co.uk/1/hi/business/7534052.stm

Are you glad the club didn't invest in some houses 6 months ago - the balance sheet would have taken somewhat of a hit.

Building flats on stadium land would also be somewhat of a risk currently I think - the demand is still out there in Oxford for homes/flats but at current prices people just can't afford them (compare average salary in Oxford to average house price) and are no longer able to get stupid credit to stretch themselves.

The renting market in this area is also likely to be weak - students aren't going to want to come out here and the proximity of Blackbird Leys means your average professional wouldn't be that keen either.

So how about some flats the council could buy - might work they are short, but do we really want a load of council flats in each corner of our ground?

However, give it 3 seasons when we're in league 1, mortgage markets are allowing lending again and inflation of 4% has made £13 million considerably cheaper then it is today then it looks a bit of a nicer purchase price.

I can't see the club or anybody getting planning permission for residential use on the stadium site. The permission across the road means it's even more unlikely now.

Kassam will make sure that there are covenants on the stadium, should he sell it, that preclude leisure uses that compete with his development across the car park so the only real option is commercial use which has much lower land values and anyway the location is all wrong. I think the plan to fund the purchase of the stadium via a development deal with a partner is dead in the water.

I don't think there would be any difficulty in getting planning permission to build flats in the stadium corners, which I assume is the point Ty was talking about.

[ty cobb]

There seems to be about 4 or 5 largely unrelated arguments through that post.

No, I'm not glad that the club didn't invest in housing stock to house players.

No, the balance sheet would not have taken a hit.

I agree that the option of financing the stadium company purchase and completion, by building flats in the stadium corners is unlikely to yield sufficient profit to make the scheme workable at present.

The renting market is not weak. It has gone sky high (so I am told). I know letting agents in my area and in the Oxford area and they are all reporting substantial increases in the letting market, because obtaining high finance to purchase price mortgages have all but gone, yet people still have to live somewhere so renting is their only option.

I can see no benefit of building council flats in the stadium corners, financially or otherwise.

If we get to the Championship in 3 years, which is exceptionally unlikely, the £13m price tag on the stadium will still be way too high, unless the conference centre business is improved very rapidly. All the signs are that conference business is falling not increasing, so that is unlikely too.

Sorry didn't mean to infer that you had previously stated all those points - just the one about buying houses about 6 months ago.

How would the balance sheet not have taken a hit - if say we'd have brought a house for £200,000 (to keep the figures simple) we would have a asset of £200,000. However, as house prices have dropped by 8% recently, that house would now be worth £184,000. Say we'd have brought 5 of them we'd be looking at a loss of £80,000 in the space of 6 months - quite a hit on the balance sheet I'd say, with more losses to come as well.

The renting market has always been good in Oxford, but it's about location and you're not going to get many people wanting to live by a sewer plant near the worst estate in Oxford. If the rental market was so good why don't all these builders keep building property and rent it out - it's because the underlying value of the asset is going to drop substantially over the next 2 years. Thats why they're all coming up with these incentives to get them off their books and are not building many more.

If inflation remains at 4%, or rises to 5% or more (see British Gas and there 35% gas hike) and we're playing in league 1 (not the champ) which is likely given that if we get out of this league we stand a better then good chance of going up again, then £13 million will not mean £13 million in todays prices and would therefore not be as bad a price as it seems now.

[scooter]

[quote=&quotGodalmingYellow&quot]
I can see no benefit of building council flats in the stadium corners, financially or otherwise.

What would work is a deal between a developer who has a site elsewhere in Oxford and OCC, to commute the affordable housing obligation on the other site to the Ozone Arena.

This would enhance the values on the alternative site and allow a profit to be made out of building affordable units.

These deals have been done in the past and have worked, in fact in the current climate such an arrangement could make a site viable now rather than waiting for an upturn.

Of course this relies on OCC being pragmatic and backing off some aspects of their ludicrous affordable housing policies, this sort of situation is however allowed for in the current local plan as amended.

As these policies are not working and OCC are getting 50% of nothing built at the moment they may be prepared to talk.

[Pe├▒a Oxford United]

The renting market has always been good in Oxford, but it's about location and you're not going to get many people wanting to live by a sewer plant near the worst estate in Oxford.

Why? People live in Stevenage, don't they?

[GodalmingYellow]

How would the balance sheet not have taken a hit - if say we'd have brought a house for £200,000 (to keep the figures simple) we would have a asset of £200,000. However, as house prices have dropped by 8% recently, that house would now be worth £184,000. Say we'd have brought 5 of them we'd be looking at a loss of £80,000 in the space of 6 months - quite a hit on the balance sheet I'd say, with more losses to come as well.

The renting market has always been good in Oxford, but it's about location and you're not going to get many people wanting to live by a sewer plant near the worst estate in Oxford. If the rental market was so good why don't all these builders keep building property and rent it out - it's because the underlying value of the asset is going to drop substantially over the next 2 years. Thats why they're all coming up with these incentives to get them off their books and are not building many more.

If inflation remains at 4%, or rises to 5% or more (see British Gas and there 35% gas hike) and we're playing in league 1 (not the champ) which is likely given that if we get out of this league we stand a better then good chance of going up again, then £13 million will not mean £13 million in todays prices and would therefore not be as bad a price as it seems now.

The balance sheet would not have taken a hit because it is not necessary (and it would be completely pointless) to recognise short term variations in valuation of long term assets like land and property.

If the club were going to buy houses for players to rent, they wouldn't be selling them, so no loss to worry about.

In 2 years time any reductions in property value now will have been reversed because demand for housing in places like Oxford is so high.

The reason that builders won't keep building and then letting the properties, is because generally they borrow money to fund the building, and then repay the borrowing from re-sales. It would be very rare for a building firm to have the cash reserves necessary to fund a large new build, and if they did, the shareholders would no doubt be demanding bigger dividends.

I'm not quite sure what other point you are making in relation to my previous reply as regards lettings. Perhaps you could clarify for me.

I understood the point you were making about the diminishing value of money as a result of inflation, and to that extent you are right that £13m in 3 years will be worth less than £13m today. However, that doesn't take account of the inflationary pressure on the club, which would offset any gain on the price tag, and it ignores that the agreed price for the stadium is massively in excess of its value, by perhaps 40%, and maybe more if the next set of conference trading figures are as bad as I expect them to be.

[GodalmingYellow]

I can see no benefit of building council flats in the stadium corners, financially or otherwise.

What would work is a deal between a developer who has a site elsewhere in Oxford and OCC, to commute the affordable housing obligation on the other site to the Ozone Arena.

This would enhance the values on the alternative site and allow a profit to be made out of building affordable units.

These deals have been done in the past and have worked, in fact in the current climate such an arrangement could make a site viable now rather than waiting for an upturn.

Of course this relies on OCC being pragmatic and backing off some aspects of their ludicrous affordable housing policies, this sort of situation is however allowed for in the current local plan as amended.

As these policies are not working and OCC are getting 50% of nothing built at the moment they may be prepared to talk.

That doesn't get away from the fact that the overall profitability of a scheme for 120 flats or so with an affordable housing ratio of 25-50%, would be insufficient to fund the £13m borrowing requirements to buy the stadium company, and the £0.5m a year losses, and £4m to build the 4th stand. Even if such a scheme were sufficiently profitable, it would be a poor use of resources to lose the potential profitability of such a scheme to an overpriced stadium complex.

[Mally]

I can see no benefit of building council flats in the stadium corners, financially or otherwise.

What would work is a deal between a developer who has a site elsewhere in Oxford and OCC, to commute the affordable housing obligation on the other site to the Ozone Arena.

This would enhance the values on the alternative site and allow a profit to be made out of building affordable units.

These deals have been done in the past and have worked, in fact in the current climate such an arrangement could make a site viable now rather than waiting for an upturn.

Of course this relies on OCC being pragmatic and backing off some aspects of their ludicrous affordable housing policies, this sort of situation is however allowed for in the current local plan as amended.

As these policies are not working and OCC are getting 50% of nothing built at the moment they may be prepared to talk.

That doesn't get away from the fact that the overall profitability of a scheme for 120 flats or so with an affordable housing ratio of 25-50%, would be insufficient to fund the £13m borrowing requirements to buy the stadium company, and the £0.5m a year losses, and £4m to build the 4th stand. Even if such a scheme were sufficiently profitable, it would be a poor use of resources to lose the potential profitability of such a scheme to an overpriced stadium complex.

The whole point of developing part of the stadium land would be to make the stadium purchase more affordable - it would be unrealistic to expect any development to fund the whole purchase.

If you are right that £13 million is 40% too high then you only need to find an additional £5.2 million to make it affordable.

Having said that I don't think there is any land use at the stadium site (that retains the stadium) that could yield anything like that.

As for getting planning permission for flats on the site I can't see it ever being granted so we'll have to agree to disagree. The only exception I could see to that is possibly if the stadium was REPLACED with houses/flats.

[GodalmingYellow]

That doesn't get away from the fact that the overall profitability of a scheme for 120 flats or so with an affordable housing ratio of 25-50%, would be insufficient to fund the £13m borrowing requirements to buy the stadium company, and the £0.5m a year losses, and £4m to build the 4th stand. Even if such a scheme were sufficiently profitable, it would be a poor use of resources to lose the potential profitability of such a scheme to an overpriced stadium complex.

The whole point of developing part of the stadium land would be to make the stadium purchase more affordable - it would be unrealistic to expect any development to fund the whole purchase.

If you are right that £13 million is 40% too high then you only need to find an additional £5.2 million to make it affordable.

Having said that I don't think there is any land use at the stadium site (that retains the stadium) that could yield anything like that.

As for getting planning permission for flats on the site I can't see it ever being granted so we'll have to agree to disagree. The only exception I could see to that is possibly if the stadium was REPLACED with houses/flats.

Purchase price which is at value and purchase price which is affordable are very different things. A house can be worth £1m, but that doesn't mean I can afford to buy it for £1m.

The £13m price tag is in my view possibly 40% too high on current value (as a 3 sides stadium with the existing conference centre trade). That would give a value of about £8m. That doesn't mean that at £8m it is affordable.

I agree that a land development should be to make the purchase affordable, but it should not be to subsidise an over-inflated price tag, otherwise that is a waste of resources. So any development should be to raise the £8m to make it affordable. A development should not be to fund the £5m over-pricing.

I agree that any land development wouldn't raise sufficient money (£8m net profit) to make the purchase affordable, and it would get nowhere near the £13m price tag.

WPLs job is to persuade Kassam to sell for £8m, then develop to provide the funding to buy at £8m. Not a chance this is going to happen of course.

[Snake]

Seems like FC Halifax Town are not afraid of the downturn in the building trade.

http://www.halifaxcourier.co.uk/news/Wo ... 4347824.jp

Oh, and what's happend to Nick's monthly update on the official site?

[OUFC4eva]

Blimey - that's a £4.5m project for The Shay and will include facilities
for Leeds Metropolitan Uni.

That sort of project was alluded to by Ian Lenagan last year.

As for Merry - who knows what's happening !

[neilw]

&quotThe balance sheet would not have taken a hit because it is not necessary (and it would be completely pointless) to recognise short term variations in valuation of long term assets like land and property&quot ..............

Yeah right. On that basis there's no problems in the banking sector then. No need for write downs. Good secure asset base at Northern Rock?

[GodalmingYellow]

&quotThe balance sheet would not have taken a hit because it is not necessary (and it would be completely pointless) to recognise short term variations in valuation of long term assets like land and property&quot ..............

Yeah right. On that basis there's no problems in the banking sector then. No need for write downs. Good secure asset base at Northern Rock?

Completely different positions as Northern Rock is a) a quoted company and not a private limited company like OUFC, and b) it operates under a completely different set of regulations.

And for the record, you've mis-interpreted the problem with Northern Rock and the UK banking sector generally. The problem Northern Rock and the UK banking sector have is not in having dodgy mortgage stocks, quite the opposite - their mortgage stocks are (generally) sound. The problem for Northern Rock and other banks is in having their US funding sources dry up, so they have an inability to trade, or offer new mortgages, which is what generates a large slice of their profit.