Back Of The Net: Cash-Rich Shed Developer Diversifies Into Football Club Ownership
As industrial yields turn rock-hard, and land prices soar, a land acquisition and development business is trying to make extra returns on its money by buying a football club.
Clowes Developments’ latest diversification was given the go-ahead on Monday 27 June, paving the way for the acquisition of troubled Derby County Football Club.
Derby County FC fell into administration in September 2021. The joint administrators received a bid from Clowes Developments (UK) on Friday, and chose them as preferred bidder first thing on Monday morning.
Cash-rich Clowes’ adventure in the notoriously tricky world of football ownership comes after a long history of diversification decisions.
The business already owns a string of eccentric assets including a golf course, a cemetery and a port.
At various recent times, the business also owned a motor-home manufacturer, a car import business, a cruise ship and a builders’ merchant. The firm’s annual report suggested it would continue to invest outside the standard property market where it thought returns could be made.
Clowes has been riding the wave of beds-and-sheds development that is sweeping across its East Midlands base. Recent buys include a 199-acre parcel of land at Castle Donnington, Leicestershire, one of the hottest logistics sites in central England.
The most recent set of accounts, to March 2021, showed approaching £270M of net assets. The firm recorded 2M SF of transactions.
Derby County is by no means as sure a bet as beds and sheds seem right now. The club fell into administration in September 2021 facing a cash flow gap of £20M as a result of the pandemic crisis. Selling the stadium for an undisclosed price was one way to help close the gap.
Reports suggested the stadium could be worth as much as £81M on optimistic assessments, or just £22M if a cooler view is taken. A rival bidder, Boston-based renewable energy investor Chris Kirchner, is understood to have dropped his bid when it became clear pricing the stadium was disputed.
The unusual investment strategy followed Clowes’ acquisition last week of Derby County’s Pride Park stadium, and the sudden departure of club manager and former England goal-scoring hero Wayne Rooney.
Chairman and founder David Clowes said that as a proud supporter of the club it was intolerable to think of it collapsing, Derby Telegraph reported.
A former pilot with a personal fortune estimated at more than £250M in 2018, Clowes is a first-timer in the volatile world of football club ownership.
The developer had previously loaned the club funds to ensure it could survive after Chris Kirchner decided not to complete a rescue bid.
If all goes well, the club could be in Clowes’ ownership by Wednesday 29 June.
