“A Question of Balance” – Portfolio Diversification or Interest Investment?


Those of a certain generation will know the above was an album by the Moody Blues. The reason I mention it is that it aptly applies to the way we try to keep ourselves and different types of investors happy.

Another way of describing it is win-win-win.

There are three parties to our business model and we have to keep all three happy and contented.

The first party is St David. Like most developers, we are in business to make a profit. If we can’t do that by developing and selling properties, we should move to another industry. We don’t need to be greedy, but we do need to make an acceptable profit to remain in business. Importantly, if we are building a long-term operation, we shouldn’t focus on short-term profits.

The second party is our short-term fixed interest investors. They need to receive an attractive return to invest with us (we don’t use bank debt, etc.). We could pay hugely inflated rates to these investors, but that would either impact us or our end buyers.

The third party is the end buyer – someone who buys a property from us to receive a rental return. Their return has to be attractive enough compared to other property opportunities.

If we become too greedy or pay too high an interest, we cannot satisfy the end buyer. If we undercharge the end buyer, it may be at the expense of either St David or our fixed interest investors. So we have to set margins to ensure a win-win-win situation for the three parties.

If it why we always say that if you want a bargain then you shouldn’t buy an acol from us.

If you are looking for a quality property at a fair and reasonable price with a great return and professional service, then you can buy from us in confidence.

We have investors who own an acol property and have also invested in a fixed interest opportunity with us. It just depends on the type of investment an investor wants, and some want both options to create diversification within their portfolio. From our point of view we can accommodate both acol buyers and fixed interest investors.

It is just a question of balance.


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