It's not often that I am lost for words but when I first met with Tal Orly and he told me about their latest development project in north London, I thought I had misheard his opening comment about the number of rooms in the building. There are of course some big HMO's all across the UK, many of which have been converted from large detached residential properties, but this was without doubt the biggest HMO that I had heard of to-date and what made it even more interesting was that it was a new build project, not a conversion.
Tal explains: "Yes it's a purpose-built block which we have just completed on some six months ahead of schedule. It will comprise of 44 self-contained rooms with a shower/W.C. but tenants will have access to separate kitchen and laundry facilities. The self-contained units each have around 15-20 sqm of floorspace with separate bills for the tenant's use of light, power and heating in their individual rooms.
There are four floors and on each floor there is a large kitchen, however, each room also has a small kitchenette space with a microwave.
"The site was originally a petrol station which represented some potential contamination issues for the developer. We agreed the deal with the developer on the basis of each party putting in a 50% equity stake and went in with an expectation of achieving a 23% return over 24 months."
I ask Tal about how they dealt with the legacy risks of developing on a former petrol station.