Conran in cash as City Lofts floats

TRENDY inner-city flats developer City Lofts' £47m float on the Alternative Investment Market today will see designer Sir Terence Conran almost triple a £1m investment in just nine months.

The company's three founders, headed by chief executive Stuart Wright, will each be worth £10m on paper from their joint two-thirds shareholding but design-to-restaurants group Conran Holdings, chaired by Sir Terence, can lay claim to the quickest profit from the investment.

Conran's firm agreed to be City Lofts' exclusive architect and design consultant in April and loaned the company £1m. The float triggers a full repayment of that plus interest and a hefty redemption penalty while giving Conran a 3.4% shareholding, worth about £1.6m, in the new public company.

City Lofts' major shareholders will be hoping to profit from the nation's housing shortage as the company offers upmarket homes in rundown parts of Britain from Hoxton in London to Leeds and Liverpool.

The company is a prime candidate to benefit from proposals in last week's Pre-Budget Report to give 100% tax relief on the first year's expenses for converting commercial premises.

It already benefits from a raft of recent tax incentives aimed at encouraging housing development on brownfield sites, which covers all of the company's schemes. Few of its new homes attract stamp duty as they are in designated deprived areas.