We are continuously asked, what does Ellandi mean? So I thought I would finally dispel the myth that it has anything to do with Leeds United.

In searching for a name we decided to go for something metaphorical. Poncey, pretentious, pointless - guilty as charged. Yet, surely better than being yet another property company called London & Something?

So, we were about to launch a business focused on property and finance into the middle of a credit crisis and a property crash. A harsh, inhospitable and even hostile environment for any fledgling business.

Yet nature shows that there is a continuous process of succession, adaption and survival. Where an environment changes and the dominant species dies it is rapidly replaced by new species, who can adapt to the environment, put down routes, grow and prosper.

One such species is the Indian Jujube Tree or the ‘Ellandi’ as it is known in Tamil and Malayalam (languages of Southern India.) This tree is an important tree in the dry regions. It has learnt to grow rapidly on poor dry soil, where little else survives.

Having grown the Ellandi provides well for the local population. It generates fruit for human consumption, animals will garise on its leaves and its timber is used for both construction and fuel. The Ellandi also has medicinal value being used to counter infection, nausea and even syphilis.

We hope that our business will mirror the humble Ellandi in many ways. Putting down routes in a harsh environment, growing quickly and delivering a bountiful harvest. Obviously keeping us syphilis free will be an added bonus.

“Developers haven’t turned bad overnight” was an expression I heard twice in meetings with bankers last week.

To be fair I think they were completely wrong; it’s just hard to disagree with them.

“Many developers weren’t that good in the first place” is probably how I would have put it. 

Many industry professionals will have laughed condescendingly as time after time clueless amateurs on Property Ladder were bailed out by a rising market, despite having bought in the wrong location, “over-spec’ed” and over spent. 

One of the saddest effects of a prolonged housing slump might be seeing the back of Ms Beeny, especially as she has such a pleasant front; even if, as Mrs R regularly points out, she does have terrible hair.

But aren’t many of the companies in trouble, guilty of exactly the same thing?

As an industry we have all looked good in the soft focus of an ever improving market, and like the over flattering close ups of the old hags in Sex and the City, all it has done is covered up some deep and unattractive flaws in the market’s facade.

It would be an interesting exercise to review a sample of both residential and commercial developments to see what the returns would have been, stripping out the effects of excessive gearing and the underlying market improvements.

The banker’s predicament is not unlike the guy (or girl for that matter), that wakes up on a Sunday morning in an unusual bed with a throbbing hangover.  Unfortunately their arm is pinned to the sheets by a less than pulchritudinous lump that they would be less than happy to introduce to their parents, never mind their friends.

Rather than Morgan’s “Prisoner’s Dilemma”, this is the Stumper’s Dilemma.

Do they take the cowards way out and gently try to remove the arm and so risk waking the monster? The potential result being a relationship, marriage kids, divorce recrimination and a premature, lonely, alcoholic death; or, take the short term pain and chew their own arm off?

Acknowledging that there are some bad developers out there also means admitting that some credit decisions were pretty poor too, but far better that than continuing with relationships that frankly would never have got off the ground if they hadn’t had their beer goggles on.

Until this happens, the weak won’t be allowed to go to the wall and one of the most important parts of capitalism, creative destruction, cannot help build better and more robust companies, and banks, going forward.

It takes a brave man to say that, especially one who has worked in retail property for 15 years and has a career of at least that long again in front of him, hopefully.  I still bare the emotional scars of having done a deal with the then Mr Green over a decade ago when his empire extended merely to Mark One. 

To be fair I have only immense respect for the guy, he’s an outsider who took on the establishment and won; his modus operandi might be brutal, but it is effective.

And don’t get me wrong, as a developer (who learnt his trade at a large retail group) I firmly believe in working in partnership with your occupiers; turnover rents, sure; RPI fixed-uplifts, love them; monthly payments on new lease, not a problem.

What the knighted and ennobled, kings of the High Street do not need is the uncritical, even fawning coverage by financial journalists such as Chris Blackhurst in The Standard, of their proposed wholesale renegotiation of existing leases.

A lease is wholly different from “any other supply agreement”, it confers a legal interest in land that enshrines, for both parties, certain inalienable rights.

For every gripe about upward only rent reviews and quarterly in advance payments, I could give you an exciting development that will be stymied by security of tenure provisions under the 54 Act.

Leases are structured to reflect their long term nature which allows both landlord and tenant a secure framework to invest in a location, hopefully to their mutual benefit.

Blackhurst is right, many of the high street heavyweights have scant regard for “supply agreements”, reputations have been built on nothing more than knocking 5-10% off your suppliers margin and pushing payment terms out to 60 days.  Nice work for your shareholders, pretty disastrous if you are a supplier.

We stick by our agreements with our partners and would expect them to do the same.

Thankfully we don’t have a legacy portfolio so it is not a major issue for us.  However, if we did, and rent was held back on a point of principle, threatening our business, we would probably serve writs to the homes of all of the directors; it might be brutal, but it would probably be effective.

We are delighted to have launched Ellandi Restructuring. This is a dedicated business focused on finding solutions to stressed loans and investments in UK real estate.

Ellandi Restructuring will partner with banks and property investors in order to restructure under performing loans and investments.

The impacts of the credit crunch will be far reaching within the property sector and Ellandi is able to deliver the full restructuring tool kit to our partners. This combines our skills in property, banking and restructuring with an ability to invest new capital in order to reposition projects that would otherwise become insolvent.

We have teamed up with a group of entrepreneurial investors who will invest alongside Ellandi in the restructuring process. They share our vision that this presents an opportunity to invest in projects that will benefit from both asset specific capital growth, under Ellandi’s management, and a medium term market recovery.

We are plaesed to be working closely with leading law firms, accountants and major banks and we hope to be able to announce a number of deals before the end of 2008.

For further information, please see www.ellandi.com/pdf/debt_restructuring.pdf

Richard Lander on Citywire rightly feels that housebuilders should stop complaining about their current predicament and demanding state aid.

http://www.citywire.co.uk/personal/-/news/money-property-and-tax/content.aspx?ID=310184

Thankfully Sir James Crosby agrees with them, so no Fannie or Freddie requiring huge state subsidy for us then.

Perhaps they would be more succesful if they had an advocate on prime time TV, like Jim Cramer on CNBC. 

In this now imfamous rant he screams that Ben Bernanke “Has no idea what’s like out there” and asks for the rate cuts and the discount window to be opened; and lo the Fed eventually obliged.

It’s quality viewing, for the first 2 minutes he simmers along and then just loses it.

Bernanke, Wake Up!

I love this guy, far more entertaining than the unbearibly smug Robert “I broke the Northern Rock story 20 seconds before Sky” Penston on the BBC.

There is a defined process of grieving that was first identified by the Swiss doctor Elizabeth Kubler-Ross, who worked with the terminally ill (John Kay FT 14/11/07).

There are four main stages:

-Shock and Denial; “Bloody hell Dawnay Day have just gone bust, thankfully we’re in much better shape so nothing to worry about here.”

-Anger; “I wouldn’t be in this mess if those b*astard bankers hadn’t lent me so much money.”

-Bargain; “Hey, Mr Banker, mate, let’s just ignore the LTV covenants, you’ll get your money back when the market improves.”

-Depression; “We’re doomed, I never should have become a suveyor in any case, I should have done somthing meaningful with my life, like be a social worker or teacher.”

-Acceptance; “I always wanted to be a social worker and my wife really does like shopping at Aldi.”

So the question is, where are we on Lizzies scale? Our experience would suggest that it very much depends on who you are speaking to, what day it is and how much they have been drinking.

How long it lasts for is anybody’s guess, Queen Victoria mourned her beloved Albert for over a decade.

http://www.ft.com/cms/s/0/852dcb7c-9253-11dc-8981-0000779fd2ac.html