The Cumbernauld site is Ilandi’s first investment sold under its Ecoland initiative, which will see the company attach affordable and environmental clauses to land zoned for development and for sale on the open market. Ilandi managing director Wilson, 35, ascribes the upsurge to “people who may previously have invested in the property market now looking at longer term, and more ethical options for their cash”.

Despite widespread suspension of building, Ilandi is confident of selling any land which gets council planning approval. The firm’s first site at Glenboig, North Lanarkshire, goes before planning this month, and if successful will see more than 200 houses built on the land. Wilson said: “The current downturn in the property market has led many developers to put their sites on hold.  Scotland needs 35,000 new homes each year; if devlopment stops for even two years, there will be a massive deficit between the demand and the availability of new homes once the market starts to recover.

“Our land options are all strategic long-term sites and we are working with property developers who are looking past the short-term downturn”. “A site which gains planning approval this year will not be built on until around 2012 and many property developers are already looking into options for the recovery of the property market”.

“There have been periods of downturn in the past, however they have also picked up again. The businesses that survive and even strengthen during these periods are those that plan strategically and are ready for when the markets recover.

Ilandi buys land from the farming community under unique partnership agreements and sells shares in that land to private investors in anticipation that they will make a substantial profit when planning permission is granted. In the future when housebuilders broker a deal for EoLand with Ilandi, affordable and environmentally friendly housing must form part of their plans for the site.

Source - Colin Donald, Sunday herald, Sept 14th

The advent of land investment companies opened up this opportunity to the man on the street and offered private investors the chance to test out a new investment opportunity. Land investment is always going to be high risk, but therein lies the attraction of the potential high returns.

The chance to invest in this type of company while also making a real difference to the country’s affordable housing shortage has now arisen; but potential investors will be keen to know if they can still expect significant returns on their investment with a clause of this nature inserted into the sale of the land.

The idea behind this type of initiative is that housebuilders will be forced to introduce affordable and environmentally friendly housing on their developments if they want to buy land from the investment companies.

The shortage of affordable housing has been well publicised in recent months and investments such as this have been introduced in direct response. This is an issue of concern for everyone from the government and local councils to housebuilders and of course home owners. However, moves to address this shortage are going to take some time to achieve and the government’s policy of delivering affordable housing can only be met by allocating housing land to enable the private sector to assist in delivering social/low-cost housing.

Land investment companies introducing affordable housing clauses to new sites coming to market promises to make a real impact in the longer term; a company could hope to deliver 5000 affordable homes in the next 10 years. Good land investment companies will be in a strong position because carefully bought land should fit in with the local council’s objectives for development.

Introducing plans for affordable housing before shares in the land go on sale means the land can be marketed properly and private investors can make an informed choice about the impact of their investment in the long term. This also allows the housebuilders the opportunity to get on board as early as possible and tie down the details of potential housing on the land prior to planning applications being submitted.

To take Scotland as an example of the strain on housing stock and opportunities for investment; the population is growing by an average of nearly 20,000 each year. People are also living longer which puts an added strain on the housing stock and a huge proportion of first-time buyers are struggling to get a foot on the property ladder.

The property sector is one of the fastest-growing parts of the economy, with an annual growth rate of 4.8 per cent between 2002-07 and recent performance has been better than the UK average for the sector.

These factors make land an increasingly attractive investment opportunity. Shares in land can be bought for as little as £5,000 which translates to a payment of £18.50 per week over a five year period; far more affordable than the average mortgage.

It could reasonably be expected this type of investment could deliver a return of several hundred per cent in the longer term which is significant, even on an initial investment of £5000.

Of course this is a high-risk, long-term investment so is not suitable for everyone, but there is no such thing as the average investor and people use it for everything, from a way of getting on the property ladder to an alternative pension investment.

There is also a growing demand for people looking for their investment not only to have returns but also to be ethical or deliver benefits. The pension service has long had a range of options allowing people to choose where their money is invested and it makes sense for land investment companies to follow in this trend. As a nation we are becoming more socially aware and as land investment companies become more established and build their reputation this type of investment will grow in popularity.

Anyone looking to make an investment of this kind should ensure the land investment company has a good working relationship with the local councils to ensure that land purchased with this type of development in mind is actually on the council’s radar for development and fits with its affordable housing plans for the area.

This does of course raise the question of corruption in the industry, but any company worth its salt will be happy to provide documents to potential investor’s lawyers or financial advisers and should in fact insist on this, especially for first-time investors.

There will always be companies out there that buy up pieces of land that have no chance of ever receiving planning permission and anyone looking to invest in land should do their research in advance. Good companies will work with renowned architects, encourage you to speak to council planners to confirm details of the ground and provide you with all the necessary documentation for your share of the land.

At this point in time, investing in land in the medium to longer term (five to 10 years) has never been a more inviting proposition, especially with other investment options being less attractive.

While this is not an investment opportunity to be rushed into, with careful consideration of the company and input from your financial adviser or lawyer there is no reason why investing in land with an affordable housing clause will not deliver significant returns in the medium to long term.

Mark Wilson is managing director of Intelligent Land Investments

Article taken from FTAdviser.com

Mark Wilson, managing director of the firm, said the initiative will appeal to those with a social and green conscience. One deal has already been made for a 50 acre site in Scotland’s Cumbernauld South where up to 400 home will be eco-friendly or aimed at lower income families.

Ilandi has earmarked seven more sites for this type of development and estimates the deals could see up to 5,000 new homes in the next 10 years.

By Natalie Kenway
Taken from Investment Week 10/03/08

A shortage of land suitable for housebuilding is seen as a major factor in the plight of first time buyers and young families trying to step into the home ownership market. But fierce competition from housebuilders for good sites has forced them to pay top prices for land, and this, in turn has contributed significantly to more expensive housing.

The launch of Ecoland is in line with the aim of MSP’s to tackle the shortage of family housing in what are termed high - demand areas. Under this new system, when a land deal is being undertaken for a builder, plans for affordable and environmentally friendly properties will be part of the agreement.

Mark Wilson, managing director of Ilandi said “The housing shortage in Scotland is a real issue for concern and one that Ilandi is committed to working with local councils and house builders to help address. “We thoroughly research each site before buying but we’re aware that once the land was sold on to developers we would have no control over the type of housing built on the site. “This project will ensure that every site sold under Ecoland will make a valuable contribution to providing homes for first time buyers and low-income families and deliver real benefits for communities”.

Ilandi, working with planning consultancy firm Keppie Design, seeks out land that does not have planning permission but is likely to do so in the future. They believe that through Ecoland investors should see a return of several hundred percent in the medium to long term. Mr Wilson added. “This is a long term initiative and Ilandi is committing a significant percentage of sites coming to market for this type of development which will see us working closely with some of Scotland’s top housing developers over the next decade.” Already a first deal has been clocked up under EcoLand with one of the country’s leading developers for land at Cumbernauld south. Most of the homes - and there could be as many as 400 built on the site - are to be affordable and environmentally friendly.

Intelligent Land Investments hope to have as many as ten sites next year with seven of them expected to feature this type of development. Within a decade their initial estimates show EcoLand projects such as these could create 5,000 new homes.

Writen by Heather Rose

Taken from the Sunday Express

Published 03/02/08

Gordon Brown recently said that 240,000 affordable homes have to be built in the UK by 2020. In Scotland, 10,000 affordable homes need to be built every year until 2012 to meet demand. However, only 4000 have been built annually in recent years.

ILI also wants to ensure new developments are sustainable and eco-friendly. It will exceed council recommendations for CO2 emissions, currently being thrashed out for the area’s new local plan.

Managing director Mark Wilson said: “We plan to earmark 10 new sites for development next year, of which six will be eco-friendly and affordable. This will create about 4000 new homes a year.”

However, the land company’s motives for affordable housing quotas and eco-friendly developments have been called into question, since its profits depend on gaining council permission to change land from agricultural to residential use.

Philip Neaves, planning director at chartered surveyor CBRE, said: “Basically, it is looking for an angle that creates a powerful case to get approval for a proposal that in other circumstances might not get consent.”

Taken from the Sunday Herald 27/01/08
Written by Adrian Morrison

For example, he admits that a site he is looking at in Cumbernauld may only have a 30% chance of getting zoned for housing, yet his first site at Glenboig in North Lanarkshire sold out its allotment of 183 shares priced at £12,000 each – a total of almost £2.2m – in 12 weeks, while the second , at Lochwinnoch in Renfrewshire, is close to following suit. Why? “I pick these sites carefully,” said Wilson. “Glenboig is a growth area with plans for about 4,000 new jobs. It is close to Glasgow and the M8. There is a business park, a new railway station and North Lanarkshire council identified a need in the area for about 2,000 new houses. “As part of this, they are already looking at redesigning part of the green belt for housing and will make a decision soon, but nothing is certain.” He is hopeful because two sites at nearby Gartcosh and another part of Glenboig have already been rezoned from green belt and developers Redrow and Barratt are on site. Wilson thinks Glenboig could be rezoned as early as as September, five years ahead of his original plan. If that happened it would be sold to developers immediately, before planning permission was approved.

“Developers will buy sites if they have been rezoned without permission, and if that happens, investors could see their returns by the end of this year or early 2009,” he said. That return could be four or five times the original investment as the value of housing land is far greater than that of agricultural land. Wilson may be young but he has worked in property development for some time. He made a fair bit of money through buy-to-let, but got out as everyone else was piling in. He hit on the idea for ILI soon after. The Scottish government’s housing strategy last year called for a substantial increase in the number of homes being built. Earlier this month it unveiled a new strategy encouraging councils to identify and release more land for housing under a new planning policy that allows the quicker release of appropriate land. The government’s goal is to increase the number of new homes built in Scotland from 25,000 a year to 35,000 a year by 2015. “Houses are needed where there is growth,” said Wilson. “This is not about building on any green belt site or indeed all of it, but on carefully chosen sites with potential .” Developers already do this, buying land from farmers with a long term option on the site. In Glenboig, for example, there are three other green belt sites in the hands of a developer. But they often give the landowner a relatively small amount upfront and his eventual benefit is loaded on at the end.

Wilson pays the owner the full amount for the land upfront and often involves the farmer in the venture, as he did with Willie Coffey at Glenboig. “Once the shares have been sold, the farmer has his money,” he said. Wilson acknowledges that some types of green belt land sales have had a bad reputation in the south of England. “There have been cases of people offering shares in green belt land that had no chance of being rezoned, but a lot of that has been stamped out.,” he said. “I am careful. I must have looked at or been offered the chance to buy up to 80 sites in the past year, but I am only interested in ones that have a real possibility of being zoned for housing.” To that end, Wilson has been reinforcing his company’s credentials to further distance himself from rogue operators. He brought on board Glasgow – based Keppie Design, experts in town planning. Keppie is drawing up the master plan for Glenboig, showing how many houses it would hold and how the site would be developed. But does the demand for land and the potential returns for investors create concern about some developers manipulating the system unfairly? Wilson acknowledges the concerns but says enough checks and balances are in place to prevent this. “If there is concern, the ultimate decision rests with the government and there is the opinion of a public inquiry so it is not just down to the council,” he said.

He has also brought in Sir Michael Kelly, former Lord Provost of Glasgow, as a non executive director and someone who understands the workings of local authorities and politics. Wilson understands that some people will see what ILI does as a gamble. “This is high-risk and people have to read a detailed memorandum, which constantly reminds them of that before signing up but there is still plenty of interest,” he said. One or two investors in Glenboig wanted to sell their shares and I had no problem reselling them.” At Lochwinnoch there is less need for new housing than at Glenboig, but part of the site is brownfield and has already attracted other developers. Wilson’s plans include building a feature to make the entrance to the village more recognisable.

The minimum investment has been £20,000 and the shares are almost fully subscribed. The land is worth about £2m just now, but according to Knight Frank, the estate agents, it could rise in value to just under £10m if it were rezoned. “This kind of investment opportunity has really only been open to large developers or pension funds in the past because it is a long term project,” said Wilson. “This is about giving private investors the same opportunity.” The local council will begin assessing its next local plan next year.

Article by John Penman.

Sunday Times, 20th January 2008.

Buying shares in the Glenboig site is one of the easiest things I’ve done. Everything is explained in layman’s terms meaning that you know exactly what you’re getting for your money. As a definite timescale can not be placed on the investment maturing I see this as something my children may benefit from in the future.

I’ve already recommended ILandI to friends and colleagues and know that some have also invested in the site. Having already bought two shares in the Glenboig site I’m already considering further investment in additional sites the company brings to the market.”