Young turk makes mark on UK real estate market

Copyright: David Lawson first published Property Week 1999

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Cold eyes stare from the corner of the room, hungry for blood. 'The Lads' are Stefan Alesch-Taylor's constant companions, watching and waiting during the endless hours he spins a web of multi-million-pound projects.

'I hate leaving the office,' he says, despite the fact that he sits in London while his schemes are scattered far and wide across the UK. 'I suppose they keep me company.'

You quickly begin to see the attraction. 'They are incredibly brave,' he says about the four frighteningly-plump piranha hovering in the corner tank. 'And once they get their teeth into something, they never let go.'

There is a common bond here, although Alesch-Taylor is neither cold-eyed nor small. A lanky 6ft 10ins of twitching energy coiled behind a paper-crowded table exudes bonhomie. But he is brave. He must be to contemplate joining the crowded list of public property companies when everyone else is rushing for the door.

Like his Lads, the City is coldly determined to see off weaklings. 'So they should,' says Allesch-Taylor. And he is the guy to help them.

Naive? Maybe. As chairman of STG Holdings, a tiny Offex-listed company rated at a mere 1m pounds, he is convinced he can help the long-awaited shakeup with his determination and energy. Others have tried; most have failed. The weight of apathy and incompetence, the skeletons falling out of dusty closets, the greed of incumbent managers have all kept minnows alive and helped drive share values to record discounts against assets.

'But the time is right,' he insists. 'Fund managers have finally lost patience and want something to happen.' Stock Exchange rules forbid the slightest hint of which company he will use as a vehicle for this crusade. It is, however, likely to involve him injecting his development program and taking a management role rather than some spectacular bid.

Despite his tender 29-years and rarely leaving the office near London's Harrods, Allesch-Taylor has engineered a series of spectacular deals in the last couple of years, showing piranha-like courage and tenacity. You don't stride into places like Glasgow, Derry or Leeds and win projects from under the noses of the local barons without developing a reputation for courage.

He admits to being an arranger - a trouble-shooter and financial engineer rather than a developer/investor. He never goes looking for schemes: a network of contacts and potential partners brings them to him. The firm only has four staff.

It all started after training as a stockbroker in Yorkshire, then discovering a wider world in which he was asked by lenders to solve problem projects. 'The property was usually OK. It was the finances that needed sorting.'

He gravitated to London and learned a bitter lesson. 'I was shopping at Sainsbury and saw an empty building. It seemed a great location so I persuaded the agents to let me take a crack.'

This was the infamous Point West office and residential complex, which left property heads rolling across the West End in the recession. Allesch-Taylor, still a tender 22-year-old, sorted out the finance, offered 2m pounds and pre-sold most of it to Malaysian investors for 16m pounds. Then just as contracts were to be signed, he was gazumped. He has stayed out of the London market ever since. 'Too many sharp operators,' he says. Hmmmm...the Lads would snigger at that one.

All this could now change, as he jousts with several smaller listed companies, offering STG as a takeover target - providing he can join the board and play on a bigger stage. He is offering a development program with an end value of 120m pounds, no bank debt and the piranha-like capacity to hammer in and bite big, juicy chunks.

The technique is well known. Find a good prospect, take a site option, get planning permission, line up a fund or partner and move on.The first example was a 1.5m sq ft development next to Teesside Airport. Invited into a deal by a local contractor in 1995, he did the necessary manipulation via his new company, Semley, bringing in Moorfield Estates as a partner. Six months later he sold out for 3m pounds.

A couple of years later he he bought Worthing Premier Properties, a BES scheme, sold the assets for seed capital and changed the name to STG.

The deal machine is now churning again:

         250,000 sq ft of mixed space on a disused industrial site in Rutherglen, Glasgow, in joint venture with Miller Group;

         plans for Ulster's first leisure park on 14 acres next to Newry Station, funded by partners Lin Yeun;

         100,000 sq ft on a retail site opposite the Foyleside Centre in central Derry, also in Ulster and another JV with Miller.;

         72,000 sq ft of offices on a site off J27 of the M62, Leeds, jointly with private developer Landmark.

Each is an example of the classic developer's skill of spotting (or being introduced to) a site which needs problem-solving and a lot of determination. Derry, for example, involves an empty building that several firms had tried to set up because of its prime location, while Miller had been trying to assemble the Rutherglen site for years.

How did Allesch-Taylor cut through the undergrowth? 'I genuinely don't know how we manage this. It is not money; it is not charm. We just do it.'

Now he wants to do more. A queue of private investors have been knocking on the door and the only way to help them is with the shares of a fully-listed company. Allesch-Taylor owns 48% of STG and only 260 shareholders hold the rest.

'There is a lot of trapped value in several small companies and we can also bring a big development program with no debt,' he says.

There is also that memory of Point West to excise by trying to make a mark in London. And The Lads are beginning to outgrow their tank.