Residential Land CEO, Bruce Ritchie, was recently featured in Property Week. Below is the article:
It is not every day that I get to have lunch at the Mirabelle. And nor is it every day that my lunch companion to have brief talk by mobile phone and coolly buys block of eight flats.
The lunch competition in question is Bruce Ritchie, who just happens to co-own the Mirabelle, one of the world’s top restaurants in the heart of prime central London, which is very much Richie’s business arena.
The rich are not, of course, like the rest of us, and Ritchie proves the point. His friends, for example include the likes of Madonna and her husband Guy Ritchie, to whom he could be related. A few days earlier, at short notice, Ritchie decided to throw a birthday bash for him, hired Kensington Palace as the venue and imported Mirabelle’s chefs do catering.
Nor is Mirabelle the only restaurant in Richie’s portfolio of upmarket eateries: the others are Drones, Quo Vadis and the Criterion.
But it is Ritchie’s residential portfolio that we are here to talk about. And, for me, the privilege is as rare as the vintage wine he orders.
Richie is publicity-shy. Few people will have heard of him, he doesn’t make the gossip columns, and he doesn’t do interviews. Even researching him via Google is a non-starter, with almost no information about him on the internet. This is deliberate: ‘I don’t like publicity that I can’t control’, he says.
Ritchie, who used to run an estate agency at one point, is now a man on mission – to snap as much prime London property as he can: all of it residential, and virtually all in purpose-built, self-contained blocks of flats and houses.
To this end, he employs five full-time and two part-time consultants, from estate agency backgrounds, whose job it is to scout the capital on a daily basis, looking for properties to acquire.
‘We talk to 1,700 agents and surveyors on a daily basis,’ says Ritchie. But (and here is the reason he speaking to The Negotiator) he would like to be talking to any that he could be missing, and as he always wants to be the first to be tipped off about suitable property, he’s keen to recruit more property scouts.
‘We don’t tend to buy anything under £1 million, and we don’t look at anything heavily regulated. We try to buy freehold or on long leases.’
Much of the property acquired by Ritchie’s company, Residential Land, is newish and purpose-built, but he likes refurbishing on an often drastic scale: he will regularly ship in his team of builders for a two-week intensive project. He has also converted the odd hotel.
What he really looks for is an ‘unworked’ residential block, where he can add value by managing it as an asset. And the value he adds is undeniable: modernised kitchens, underfloor heating, solid wood flooring, steam and rain showers, real stone tiling and climate control are just some of the many finer points of his interiors. And, while most of the properties are bought to be managed by Residential Land, the company also trades and sells, using the same network of estate agents that buys though.
The son of an eminent doctor, and whose older brothers are a barrister and a scientist, Ritchie left school without really knowing what to do. ‘I went to Harrods as a trainee and bought a three-bedroom Wates house for £64,000. I lived in it for nine months and sold it for £93,000, which put my earlings at Harrods into perspective and opened my eyes. ‘He shapped up another property for £72,000 and sold it two weeks later for £86,000. It dawned on me that not only could I make a profit in property, but I could make it quickly.’
Of course, it wasn’t all plain saling. In the eighties, property prices soared but then crashed fast: ‘One minute I was Mr Rich and the next, on the skids.’
By 1992, he was seriously back in business. With property prices still in the doldrums, he was talking to developers, buying blocks of flats at 40% discounts, on tiny 1% deposits, access on competion, and delayed completions, and then selling at auction: ‘I knew that if you could only buy cheaply enough, you could make a profit on particular day.’
Money to spend
Buying cheaply in prime central London is now a thing of the past, which means that in investment terms, yields have taken a bashing. But that doe not mean that there aren’t huge profits to be made and there continues to be substantial capital apprerciation in prime central London, which is why Ritchie is pursuing his ambition to buy 1 billion pounds worth of property in the capital’s 24 top postcodes: we are talking Knightsbrige, not Docklands, Chelsea not Hammersmith, and St John’s Wood rather than the city.
And absolutely nowhere on the ‘wrong’ side of Thames:’I’d get a nosebleed if I went south of the river,’ jokes Richie. The buying vechicles are two buy-to-let property funds, Pure Skill and Acquire London, created in a partnership with Richie’s Residential Land and Souh Bank of Scotland.
The idea is to invest in prime central London residential property at the level of hedge fund, and also to tradee and develop property as the portfolio builds up over the next five years. The advantage of buying blocks is their flexibility: individually refurbushed flats and houses can be sold off as and when necessary, or if they don’t quite fit the portfolio. The ultimate aim, however, is to build up the portfolio to sell it within two to five years, possibly on aninstitutional basis. A hallmark of the acquisition strategy – as I have just seen for myself – it that properties can be bought at lightning speed. Ritchie palns to buy up to 2,000 more units over the next 18 months and is open-minded as to whether he’ll also look at some flagship buildings.
Ritchie himself privately owns seven properties and believes that residential property investment is safe, although he cautions: ‘Any fool can buy, but it is a clever person who sells at the right time. At the moment, I am buying, not selling, although it’s not a race to spend: it’s just prudent.’