Jim Armitage: Crazy money for bricks and mortar – that we paid for
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Friday 20 December 2013
Outlook Lord Kirkham, King of Sofas, provides us with a tale for our times.
In the heady days before the financial crisis, when banks would lend a billion over a bottle of Mouton Rothschild on any old bits of bricks and mortar, he split his DFS retail empire into two: a property company and a trading company (which he later sold for £500m).
The property company consisted of 22 DFS sheds, four distribution centres and company's head office in that property hotspot of Doncaster. Banks flocked to lend him the money in a sale-and-leaseback deal reportedly valuing the buildings at £150m in 2005. By 2007, when more banks were invited in to refinance the debt, they were valued at £250m. What had changed? Nothing, except the banks had got even stupider.
Yesterday, those banks decided it was finally time to cut and run. They pulled the plug and sold their loans on, bearing multi-million-pound losses. Now take a guess which were among the biggest to get burned. You got it, bailed out Bank of Ireland and our very own RBS. Like I said, a very modern tale.
- 1 Kylie Jenner challenge: Bizarre lip suction device inspired by Kardashian sister goes viral
- 2 Rarest Beanie Baby bought for just £10 at car boot sale could be sold for £62,500 on eBay
- 3 Katie Hopkins and The Sun editor are reported to police for incitement to racial hatred following migrant boat column
- 4 Bruce Forsyth backs assisted dying campaign: 'If I had Alzheimer's or dementia I would do something about it'
- 5 Giorgio Armani criticises the way some gay men dress saying 'a man has to be a man'
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
iJobs Money & Business
£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...
£21000 - £24000 per annum: Ashdown Group: The Ashdown Group has been engaged b...
£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, int...