The following article appeared on the RedAction news service, written by Robert Gaffney. It is reproduced with permission, but Robert asks me to add that it is speculation on his part. Even so, it is the best bit of speculation I have seen on this.
I’ve been looking at the property piece of the finance figures today. the below is very much back of fag paper calculations based on mean averages …. Note, this is all at 30th Nov 08.
In total, there are 655 apartments in highbury square.
Of these, Arsenal claim to have an unsold stock of about 60, meaning we have completed/presold 595.
The East and West have not been released yet, however, they will be in four months.
There are 326 appartments in these two stands, of which 293 are pre-sold. Simply talking, 33 of these are not pre-sold, which means of the 60 held in reserve, 27 are from the completed units in North bank and clock end.
In the north bank and clock end, there are total of 329 apartments. As above, that means all bar 27 are sold or presold.
The contstruction costs are all complete now and thus, all sales completions go to repay the load which stands at £133 (down from £135m).
In the last 6 months to nov 08, we completed 140 apartments in the north bank/clock end for a total of £58m. thats an average of £415,000 per apartment.
Now, this is where it gets muddy because it does not state how many were completed in before this six month period. i.e. – there are 329 releast and available for completion, we know 27 have not sold, we know that 140 have sold. So what of the other 162? some woul have been completed in the prior periods im sure but real key is, how many of the 162 are realistically going to sell?
Working with what we do know, the release of the north bank and clock end in four months (just in time for the annual figure) will see a flood of money come in. Assuming the best (which wont happen), we will complete all of those 293. using the average sale price this period of 415k, that’s an income of £121m, reducing the loan to 12m outstanding (or an Andrey Arshavin). Of course, its all pie in the sky because the average price might not be anything like that!!
They key is the unknown 162 apartments in the North/bank and clock-end. Also, the residual value of the 60 in reserve which can im sure be held as an asset against the liability.
Id love to know if anyone has more details on this – im taking this from the interim results which is vague and doesnt give previous sales details.
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