"Our renewal project in King's Cross has made considerable progress, with more than one-third of the works already underway..."
Lord Bute lit up his cigar, enjoying the smell, and said to Barron,
"And we think your previous proposal makes sense. Indeed, the real estate market in London will continue to improve. We can rent out those properties and have a stable and continuous income."
"But the problem is that a considerable part of the project's funding comes from bank financing, which has financing costs. If the funds cannot be rolled over to carry out the King's Cross renewal project, then as the number of projects starts increases, it will be easy to have liquidity problems."
What Earl Bute said is not without reason.
Before this, Barron did mention that in the King's Cross urban renewal plan led by Argent Real Estate Group, the residential areas and office buildings they built, especially the office buildings, could be owned by Argent Real Estate Group itself and mainly rented out.
The reason is that they are optimistic about the future of the British real estate industry, especially the huge gap in office buildings in London. Once built, there will be no trouble renting them out. This is a very stable source of income, and at the same time they can wait for the appreciation of the real estate they hold.
After investigation and research, Argent Real Estate Group also agreed with Barron's suggestion.
So far, apart from the high-end Kings Mansion, which was converted from the former gas tank "triplets", only two office buildings have been sold among the completed buildings in King's Cross by Argent Property Group - both of which were sold to DS Asset Management, namely King Cavendish Building and O2 Building.
"So you hope to raise funds by listing the company?"
In response to Barron's question, Earl Bute shook his head slightly and said,
"Not only that, in addition to issuing some new shares to raise funds for the listing, some of our previous shareholders also want to sell their shares to cash out..."
The main reason why the urban renewal project of King's Cross was handed over to Argent Real Estate Group to lead was that Argent Real Estate Group obtained the support of most of the land holders in this renewal area.
In addition to the real estate owned by the Bute family and their "allies", as well as Barron's real estate, it also includes organizations such as the Coal and Grain Merchants Guild and the Goldsmiths Guild, which have invested in the company with the real estate they hold. In addition, Barclays Bank and the Real Estate Dealers Guild have also invested and hold a considerable share.
If Argent Property Group chooses to carry out the King's Cross renewal project in phases, after each phase of construction is completed, it will sell the property, recover the funds, and continue the next round of construction... then these shareholders will also receive considerable pink income.
However, if most of the office buildings are held by themselves and rented out, the capital will be occupied more in the short term. Some shareholders may not be willing to hold shares that are difficult to generate returns for such a long time. Therefore, if Argent Real Estate Group goes public, they will have more options. In addition to being able to sell shares in the secondary market, the market value of the company after listing will be more certain, and the value of these shares will be more easily recognized by banks, thereby obtaining loans through mortgages.
This is what Lord Bute said next:
"After Argent Real Estate Group goes public, we will not be limited to issuing new shares for financing. We will have more options. Whether it is borrowing from banks or issuing corporate bonds, listed companies will have more advantages than private companies."
"That's good, I agree to do that."
Although Barron does not mind continuing to inject capital into Argent Real Estate Group, or purchasing shares from other shareholders, one needs to consider whether his doing so will cause unnecessary concerns from the Butt family, which currently holds a controlling stake.
If he intends to make real estate one of his main businesses, he would not mind doing so and slowly take control of Argent Real Estate Group. But in fact, he is not too interested in this. He only needs to invest in these real estate companies and hold shares in them. There is no need to distract his attention from their operations. So for Argent Real Estate Group, it is understandable to optimize its financial situation by going public.
Currently, DS Capital holds a 31% stake in Argent Real Estate Group and is one of the largest shareholders, second only to the Butt family. Therefore, matters such as IPO listing must be communicated with him.
Anyway, Barron himself has no ambition for Argent Real Estate Group, so going public would be beneficial to him.
At least there will be better valuations in terms of loans obtained by mortgaging Argent Property Group.
"Another point is that our projects in the King's Cross urban renewal plan have now reached a stable stage of advancement. We just need to proceed according to the plan. Argent Real Estate Group also hopes to continue to seek other projects..."
Count Bute suddenly thought of something and said to Barron,
"I noticed that the Caesar Foundation seems to have made some moves in Shoreditch in the East District. The situation there was similar to that in King's Cross before. Now it seems that many art studios are concentrated in Shoreditch. Do you have any ideas about that place?"
Barron knew that what Ian Boot was talking about was the Digital Future Building being built in Shoreditch by Digital Future, a subsidiary of Caesars Fund. The project was also carried out by a construction company under Argent Real Estate Group.
"I just think the artistic atmosphere there is somewhat similar to the innovation of the Internet industry, and the key is that it is very close to the city center and the land price is low... Well, it can be said to be the first attempt. The subsequent progress also needs to be based on the development of London in Internet technology. At present, it is not the time to actively promote it on a large scale."
Earl Bute nodded when he heard this. He had indeed been concerned about the East End of London before and had analyzed the feasibility of what Barron mentioned. He also did not think that there was any possibility of developing a large-scale urban renewal plan like King's Cross there at present.
You should know that the urban renewal plan of King's Cross has received great financial support not only from the Kent district, but also from the London City Government. It is hailed as the largest urban renewal plan in the core area of London in nearly 150 years. It can be seen from here that this kind of project does not appear casually.
And no matter which country, as a real estate developer, the relationship with the government is very important. Argent Real Estate Group has no need to engage in real estate development in the name of technological development for short-term interests - just like a so-called "little superman" in Hong Kong who developed PCCW...
If you do this kind of thing once, you may get good benefits, but the final mess will be gone, and even if you get rid of it, you won't get any good opportunities in the future.
Therefore, after hearing Barron say that it was not a good time to push forward the East District Renewal Plan, Earl Bute also let go of the topic and said:
"I am also considering opening up new markets, including Australia, India or Greater China, which are all under evaluation."