1995

We purchased a small distressed commercial property, 14 Home Street, Tollcross, Edinburgh from the Allied Irish Bank and after fully refurbishing with our “back to brick” approach and an all in cost of £150k inc refurb, financed by Natwest we commenced trading the amusement arcade business from zero.

We started and scaled the EBITDA of this very small amusement arcade business, some 700sqft and sold it 2.5 years later in 1998 for £750k. The EBITDA multiple we sold the business for was 5X and the EBITDA was £150k which is £214/ft on exit. The deal to sell the business took that long that by the time we completed the sale of the business, EBITDA had grown and the 12 month trailing contribution was £197k, so yes, we left some money on the table. Though I am always of the mind to leave something on the table for the next guy.

Direct Lumpy Mail

The success of the business was down to the marketing activity through direct mail or “lumpy mail” as it’s called which became the backbone of our ability to drive EBITDA from zero in such a short space of time. We posted bananas, tea bags, KitKats and many other items with an old school long form sales letter that we created from scratch ourselves. These strategies were learned directly from our first ever mentor, an American marketing genius called, Jay Abraham.

We invested £6,000 in early 1996 to learn these strategies from Jay Abraham, back when £6,000 was a significant sum of money and the ROI has been nothing short of incredible.

A big lesson was learnt, if you want to climb a mountain, ask a sherpa, someone that has done it many times and is still doing it, education and specifically mentors collapse time, reduce risks and introduce you to strategies, people to achieve outcomes in a condensed timeframe. It’s a shortcut to success in any given field.

2000

GGCL purchased the Largs freehold property with funding provided by the Allied Irish Bank. 

GGCL purchased an AGC in Perth with a lease option and funding provided by Allied Irish Bank to acquire the freehold when we took up the option.

2001

GGCL purchased a freehold in Springburn, Glasgow for the development of an AGC with funding provided by Allied Irish Bank. This included a full redevelopment “back to brick” approach.

2003

GGCL redeveloped the Largs location from a tired traditional seaside amusement centre to a completely revamped leisure venue; incorporating ten pin bowling, bar, restaurant, gaming centre and fec. The profit leapt from £150k to £625k in the first year of operations after opening on 27th Oct 2003. This included a full redevelopment “back to brick” with 360 degrees of elevations being replaced and extended North and South, some 540 feet of elevations, new 16,000 sqft of new roof and full refurbishment internally. The spend was just north of £1m for the redevelopment. We refinanced the business with a loan from HBOS, Bank of Scotland.

2007

Two external events altered the shape of the business, these were;

1. Gambling legislation was amended for the first time in 60 years;

2. The smoking ban was introduced in UK

The impact of these legislative changes was significant because;

The maximum stake per machine was reduced from £2 per play to £1 per play. In addition, the number of maximum payout machines per site, was reduced considerably from unlimited to 4 per AGC making an incredible unfair playing field with the bookmakers.

The other fundamental change was to move the “High Jackpot” games from “random based play” to “percentage based play”.

The outcome from the changes was a c30% reduction in turnover and eradication of existing profitability across the estate. In some cases it rendered marginal sites loss making and led to a program of site closures and cost reduction measures.

In conjunction with these external factors, the more general collapse of the economy and, in particular the property market, also impacted the business. Falling property values gave rise to significant loan to value issues in terms of banking covenants.

Key point: The core business remained significantly profitable but was too highly geared with a debt of £21.4m on a valuation of £29.8m which was decreasing.

As a consequence of all of the above, the partner/directors approached their bankers with a view to restructuring the business and its debt. The important point to note is that the business remained significantly profitable however it was, as a consequence of external factors, too highly geared both in terms of debt serviceability and value. Throughout discussions, Barclays have acknowledged the fact that the business remains highly profitable but that it simply cannot live with the level of debt taken on at the height of the property boom and the highest interest rates for a decade.

When the partners/directors approached Barclays to discuss a restructure, they did so with a plan. That plan was to market and sell the trade of GGCL to a competitor, a PLC company in the sector and retain the commercial real estate on long term leases to the PLC therefore increasing the value of the property through yield compression due to a stronger tenant guaranteeing the rental streams.

The bank agreed to the proposal and over the ensuing months entered into negotiations with various parties and ultimately agreed a deal with a PLC in the sector.

After a lengthy legal process we set a completion date, April 2009, to sell the business to the PLC that would provide £2.4m to GGCL (signed contract attached below) and just under £800k of yearly rent from the long term leases to the property partnership with the Bank as equity partner. We were to retain four businesses to operate.

On the day of deal completion, with 62 staff from either side in each site across the UK at 6am and the directors in their respective solicitors’ offices. The transaction was signed by the PLC and ourselves at 4.30pm. We had saved the day and neither party could get out of the contract. Just one thing remained, one A4 fax from the Bank remained, final signed discharge of security to release the business to the PLC and we would receive the £2.4m premium from the PLC for the selling the business that would pay down debt and we would benefit from nearly £800,000 yearly rent guaranteed by a PLC for 15 years.

At 11.15pm the bank finally called and refused to provide confirmation that they were happy to release their security.

The bank’s decision or at least the official statement was as a result that they could not get enough comfort around the contracting party in respect of the purchaser, despite £226,000 having being spent on legals and whilst they later confirmed their ‘worthiness,’ the deal was lost.

Though looking back it’s easy to connect the dots with the timing of events of the bank not crystallising positions while raising an offshore promissory fund of £5b to shore up their balance sheet to avoid the same fate as RBS at the time and then the following year when it was in place they commenced the crystallisation of their various positions to cut losses once and deeply. I notice the 3 key members of the bank’s board have been in the papers recently regarding these actions.

2010

My wife, Elaine and I bought the Largs leisure centre property and business back from PWC acting as administrators on behalf of Barclays Bank for £1.25m. After the last 3 years, financing such a transaction was not easy to say the least and we continue to be so grateful for friends and family that supported us through this period.

The gameplay here was very simple… survival. This deal was the single most important and hardest transaction I have ever been involved in as my back was against the wall, I had to win, I burnt my boat and went all in.

After we stabilised operations and slimmed down the team, my wife and I went back to work in the business, while I also started to come up with a plan to transform the business into secure long term hassle free income streams backed by bricks and billion pound national high street brands to create time, money and location freedom for our family.

2015

After many years of negotiating with national high street brands, planning dept, licensing, Councillors, local town electives we started the redevelopment of the Largs property to transform from a trading business into a blue chip investment with a parade of national high street brands.

We secured significant and strong tenants on strong leases from 15 years to 35 years and created significant high street regeneration bringing some valuable brands into the local high street and creating some 60 jobs.

The tenant’s proceeded to spend £2.1m on the property. Read that again and let that sink in for a moment. 

1. JD Wetherspoon, 30 year lease with breaks at 10 yrs and 20yrs
2. Coop Food, 15 year straight lease, no breaks
3. Costa Coffee, 15 year lease, breaks at 6 yrs and 11 yrs
4. Merkhur Gaming, 15 year lease, no breaks
5. CMAL, 35 year lease, no breaks (Govt quango, asset owning division of the Scottish ferry operators)

Secure Long Term Income Streams backed by Bricks & National High

Street Brands Rent £221,000 per year

“Moats”

Very strong location surrounded by Infrastructure “Moats”

What does this mean?

Simply that the trunk road, the car park, the promenade, the sea or the ferry terminal will not ever move which creates asset protection.

We always look for “Moats” both infrastructure and other “Moats” for asset and income protection.

2019-2020

During this time a number of individuals reached out and asked for a little help with transitioning from residential to commercial real estate.

So I started helping people 1:1 and then evolved into small boutique classes as below in London and Loch Lomond hotels.

Then as people needed more hands on help with commercial real estate we evolved into a Club, with a monthly membership that during Covid had 64 members paying £600 per month.

It was fun, though more and more people asked for a 1:1 and the common thread was that most people did not have the time, experience, knowledge or wanted to take the risk alone.

Though what they did have was an unprecedented need to grow their capital that was locked in their pension, company or personal capital as it was being eroded with the effects of inflation and they desperately needed a solution, so they wanted the benefits of real estate without the hassle of real estate.

After endless talks with legal advisors we came up with a compliant solution as the world of financial promotions is another highly regulated space just like gambling previously though we found a solution and started to build a very private club crowd funding platform for our club members.

The Norwich House property was funded by club members and also traditional finance. The private club members loan was for a fixed time of 3 years, though we managed to repay the investors a year and a half early redeeming the loan in 2022 when the uppers was sold to a residential developer.

2022

After years of patience, tracking and waiting for occupancy levels within the University’s residences to achieve under supply levels and many years of building relationships with key stake holders in Paisley area we decided int was time to pursue a new build boutique hotel offering for students providing 150 studios.

The location is fantastic, being right next door to the Student’s Union and over the road from the University while the train station is a short 5 minute walk and Glasgow city centre is only 10 minutes away on the train.

Demand outstrips supply and indeed in Glasgow there are a significant number of students being housed in Stirling due to under supply, that a 90 minute door to door journey for students to get to Glasgow.

The sector is booming and income is set to grow year on year.

We are in negotiations with the University to market and manage the property when built.

We are currently in legals to purchase 125,000sqft mixed use island asset. There are 39 commercial units of which 7 are vacant, there is also 25,000sqft of vacant office space upstairs.

Hull NOI

The current £800k NOI is a fantastic base to work from with current rent/sqft being just under £20/ft.

Hull - The Game Plan

We will create a standard lease for all new tenancies/re-gears.

1. 15 year lease, breaks at 5 and 10 yrs
2. Rebase the rent to £12/ft from £20 and £3/ft service charge so £15/ft all in rate to simplify the process with a simple online portal for HOT’s / leases.
3. Automatic rent uplifts of £1/ft at 3/6/9/12 years. This sill save circa £1m over only 3 rounds of rent reviews, being £320k for every standard “39” separate rent reviews inc agents and legals, based on the recent CEX re-gear which has also taken 18 months of time, effort and expense on my part. This process is antiquated and it’s time to rethink tenancies, time to rethink tenants as partners, it’s time to utilise technology to eradicate the wasted time, effort and expense of old draconian ways.
4. Rent free package for new nationals coming into the scheme to reflect the value they bring in attracting and retaining other regional and local businesses as tenants within the scheme.

Uppers

1. We have 25,000 sqft of offices upstairs which is currently vacant.
2. It currently has a new lift installed in 2019
3. It has new electrics also installed in 2019 with sub meters for each office space
4. These infrastructure improvements would of cost circa £270k and will be invaluable to letting it to a co-working business or service accommodation business or indeed let on a traditional AST once converted to residential if required.

Uppers - Game Plan

1. Seek and secure a co working office operator with a reasonable balance sheet and secure a lease at £5/ft bringing £125,000 of extra rent into the property.
2. Resubmit planning permission that was submitted in 2018. The residential planning application was recommended for approval by the planning dept and withdrawn when the current owners decided to proceed with the office use. This was just before Covid and unfortunate timing.
3. Seek and secure a serviced accommodation operator with a reasonable balance sheet and secure a long term lease reflecting the refurbishment they will have to provide to transform the offices into residential.
4. The third game plan if the first two do not materialise at the right levels. We would submit the residential planning application and after planning is secured we would sell the residential development to a local developer. There are already 16 residential apartments within the asset that have been carved out and sold in 2018 to a local developer, 5. 1. 2. 3. 4. 5. 6. 1. 2. next door to the existing office space so it makes a natural fit. The previous developer of residential apartments have previously offered to pay £750k for the vacant office space which works out be £28k per unit as the space fits 27 apartments within the 25,000 sqft.
5. The last game plan is after we receive planning for the residential conversion we would proceed to transform the offices into residential, which is an internal refurbishment of the existing space and subsequently let out on a traditional AST which would be part of another separate application for finance in the future if options 1 to 4 do not provide best value.

Commercial

1. The asset is ideally situated within Hull being hedged between the train station and the Queen’s gardens with a large community seating space in-between the asset and the Queen’s gardens.
2. We will be targeting very specific offerings to diversify the asset while reducing risk. We aim to bring in 2 national restaurant chains within the asset, one to replace Barclays in the prime corner position. This location has 10,000sqft over 3 floors and has a tremendous opportunity to provide an attractive first floor outdoor eating area complimenting a planned outdoor terrace on the ground floor.
3. Barclays wish to remain within the scheme and have entered negotiations to take a new 3 year lease with a 6 month break as they wish to move within the scheme and take 2/3 units solely on the ground floor opposite Costa and close to McDonalds without any upper parts which dove tails very nicely into our plans for the uppers to repurpose to co-working/serviced accommodation or residential throughout the entire property.
4. EE have left the asset as they wanted more space. We will be contacting “McDonalds” and “Three” phone shop to see if wish to regear their existing leases and expand into the neighbouring unit.
5. We target non discretionary spend. We love national high street brands and also local brands though what we love most is essential daily spend. The type of spend where no matter whether we have a recession or no recession, you have to spend money on these goods and services. This sector of the market are the most resilient and will hedge against tenant “churn” which erodes EBITDA through legal fees, agent fees and lost further opportunity fees.
6. We will target with a multiple approach to the market.

Adding Value - Repurposing & Filling the Asset

1. We have secured two national agency’s specialising in food and beverage, Knight Frank “KF” and Davis Coffer Lyons “DCL”
2. We have secured a regional retail specialist Brassington Brown that have proved to be fairly good at securing tenants to date. 3. 4. 5. 6. 7. 1. 2. 3. 4. 5. 8. 9.
3. We will have a local specialist for small local businesses being the site manager that will come to work with us. He is an absolute gem and used to manage a shopping centre. He knows all the tenants by first name and is pivotal in the plan going forward. His cost is contained within the service charge and therefore is not earnings dilutive.
4. My daughter, Dani Taylor along with our virtual team member will be reaching out to all our contacts in our black book of tenant contacts that we have built up over the years. This is very extensive to say the least and has proved very fruitful securing national high street leisure and retail brands in other assets.
5. We will also be running multiple recurring searches on existing leases within the local area that will be coming up for break/renewal over the next few years as we can offer significant reductions in the cost to operate for many businesses. So in essence, we will be contacting all tenants in the surrounding area that have short term leases and are able to offer them to half the rent within our scheme with a significant capital expenditure contribution for the shop refurbishment from grants we have secured.
6. A continuous and relentless social media campaign to increase reach and share stories of existing partners within the Queen’s House. This will be targeted at local and national businesses by connecting with people. It’s time to rethink the landlord/tenant relationship, it’s time to level the playing field, stand together, it’s time to partner and profit together by serving at a higher level.
7. I personally have secured all the tenants personally in the Largs location, all national high street brands. I contacted, negotiated, secured them personally and have also re-negotiated the rent reviews personally.

• JD
• Wetherspoon
• Coop Food
• Costa Coffee
• Merkhur Gaming
• CMAL (Govt quango, asset owning division of the Scottish ferry operators)

8. I have also negotiated with 2 other national high street brands in the Norwich House, Guildford property.

9. The reason I have been successful in securing national high street brands is that an agent has to put bread on the table for his bonus. He needs to do this quarterly and will always go for the low hanging fruit, the easiest to convert as he will have many plates spinning. One of the good agents I know personally has 86 live transactions currently. Hence, he has no bandwidth, he has no time. So he and all the agents revert to their “go to” strategy which is reactive, wait for the phone to ring which is very old school though prevalent throughout the industry 10. as understandably they need to put food on the table every quarter so they work with the tenants showing a desire.

10. I on the other hand, do not need to concern myself with quarterly targets for new tenancies. The asset is far too important for short term thinking as a tenant can add significant value to any asset and become a gravitational force attracting other tenants. So I play the long game, the game that can double or triple an assets value as shown previously. I deal in a very proactive way, remember the “lumpy mail”.

After completing on the Hull acquisition we will be raising a war chest to buy the next large assets for discount from banks hedge funds and pension funds who desperately need cash back in the door. They are also not set up to asset manage or sweat the asset as we are. It’s what we do, we eat, sleep and breathe this on a daily basis. We deal with billion pound national high street brands on a daily basis.

Opportunity

Today we are in the down cycle of a short term debt cycle. We will bottom out and come out the other side as we always do which may last circa 3 years and we will have the start of another short term debt cycle on the upward side as we always do for circa 3 to 9 years as Ray Dalio of “Bridgewater” describes them.  

So we have a unique opportunity to acquire assets literally at pence on the pound from banks, hedge funds and pension funds that are currently disposing en masse. These are distressed buyers, not distressed assets as I mentioned the Hull asset is already contributing £800,000 and we will force cashflow to circa £1.2m which forces capital appreciation to a net value of £15m and we are paying less than half of that today.

Urban Alchemy

We do this with our own unique blueprint called “Urban Alchemy” where we repurpose, re-profile and regenerate redundant retail from low performing assets into mixed use, hybrid, high performance income producing assets.

VIP Club

We also have a very private investors club where we help busy professionals, business owners with no time that have capital to invest and desire to diversify, protect and grow their capital investing with us if they qualify.