Scottish leisure park - valuation double asking price

Every few months a turkey is found but usually sense prevails and it is released back in to the wild. Savingstream do the right thing.

Apart from the fact that the valuation appears unrealistic with respect to all the easily visible sources of information (including the newspaper article when planning permission was granted in 2014 which also states an expected sale price of ~£2.1M) and the fact that it appears to have been for sale for at least 5 years even the business plan looks unrealistic.


I don't see how the exit strategy of selling on is going to work if they aren't intending to do any further development themselves as they are neither adding value or doing anything to improve confidence in the viability of the approved development. 

One totally crazy thing in the SS management position is the defence of that totally wrong estimate.
First RULE is: it is the market that makes the values, not a random surveyor on paper. If the market tells us that plot is worth less than 2 Mil, it means that today it is Worth less than 2 Mil.

Anyone lending on the basis that the plot is worth 4 Mil. (when the market is telling you it is Worth less than 2 Mil.) has zero brain (or has too much brain and something to hide....). I cannot understand the SS position. They are clever guys and cannot believe they fail on such a basic reasoning.

Even if they trust this surveyor (he would disappear forever from my books anyway....), when such a big discrepancy opens, they need to be cautios and drop the deal. There are many deals around. Don't take the crazy ones.

tend to get the impression that the 'valuations' are as steeped in accuracy as the loan updates tbh

keep spinning the plates & pushing repayments further down the road and hope for the best innit

A big difference between this and the garden centre is that the PBL020 loan was for 70% of the value whereas this one is at 44% of the value.  There's a lot less room for error with a 70% LTV loan than one at 44%.

Having said that, though, my SS loan portfolio is pretty diversified at the moment, so I don't really need to add another loan to it, and as a result I've reduced my pre-funding for this loan yet again.  The level of PF over-subscription for this loan -- or lack thereof -- will provide a good indication of the proportion of SS investors who just invest in anything SS offer up. 

This also illustrates the conflict of interest inherent in the SS model, where SS need quantity and SS investors need quality.  SS have a delicate balancing act.

The loan is for £1.8 million we know it is on offer for sale at £2.1 million. We also know it has been on sale for that price for years and SS stated on there recent update that the borroower is paying £2.1 million as a quick sale. How this works out is anybody guess as has been on sale for that price with nearly 1/3 as much land for the last few years.

SS state that they have interst from other companies to buy it off them but I am sure thesate other companies can use google just as well as us and if it that much of a good offer rush in and pay £2.2 million now rather then more then double in the near future which seems to be the plan of the loan.

They state they will do no work so how is it possible for the value to increase so much?

So all we really know is that the actual value of the land in its current form is less then £2.1 million and probably significnatly less as there is nearly a 1/3 of land missing. So the valuation is nowhere near the stated 40 odd percent.

In the comparasion to other sites they have used ones in already popular tourist areas and ones that have had worked done, most of which have been nearly fully done and then stated in the swot anaylsis untested demand as nothing similar near by. So there is no ready market which the other sites have.

100% agree.