The risk that paid off

With a lot of help from their friends, two young Londoners have turned an old workshop into a dream home.

HAVE you've ever stopped outside some dilapidated old warehouse and briefly fantasised about how you could make it into your dream home? Most of us have.

We have looked up and imagined the terracotta-brick walls, zinc surfaces, wooden floors and designer sofas - then walked on.

But business partners Misha Manson-Smith and Josh Appignanesi did not walk on when they saw the derelict shell of a five-storey workshop four years ago in Tabernacle Street, Shoreditch. It had no floors or staircases and had been abandoned for 20 years.

They instantly recognised it as their potential dream home. "I'd been looking for a project like this," says Misha. " Having always rented, I had missed out on the property boom, and this was exactly what I wanted - to build a home from scratch."

Misha and Josh, two directors of film company Mercenary, located the owner through the Land Registry and put in an offer to buy.

They got the building at a price they could afford, then put in an application for planning permission to convert to residential.

They made a decision to put their careers on ice, and formed a development company together to manage the building.

They formulated a business plan and persuaded a consortium of friends and family to stump up cash for the investment.

"Everyone who invested in the project knew that the property market was going well," Josh explains. "They saw that as long as the market continued to grow their investment was a safe bet."

Nonetheless, their investors - who had remortgaged their homes and put their assets up to be part of the consortium - were in no position to lose their capital.

So getting proper advice and finding the right architect was absolutely essential.

Prize-winning architect Sarah Featherstone was already a close friend.

Sarah says: "We were all living in the Shoreditch area, so we had a mutual understanding of the project. The development was all about putting together a network of friends and helping each other to recapture the ambience of the live/work studios of Shoreditch of 10 years ago."

An external spiral staircase was built at the rear, which left more space inside the building for the apartments. The basement and ground floors were kept for commercial use, and sold off to a design company midway through the project, which helped the consortium financially.

The rest of the building was converted into three apartments and one penthouse, which were all sold off-plan. One friend bought the penthouse, Misha bought one of the flats, and a friend of Sarah's bought the remaining two.

The former warehouse is now an impressive combination of wooden floors, decked balconies, large windows and fittings designed to maximise living space. The final touch is a 12m-long artwork for the hallway, created by artist friends Alice Bogaerde and Natasha Law.

Originally planned to take seven months, the whole redevelopment process was eventually completed in two years. But although the project has been a success, it wasn't hassle-free.

"Those two years were a hell of a time," remembers Josh. It was a lot of work. The project wasn't like buying and doing up a house: we had to hire cranes and develop on a huge scale.

"It was a fulltime worry and we had quite a few sleepless nights, for if the market had turned everyone would have lost an awful lot of money."

Misha agrees: "The project cost three times more than we had budgeted for because the market was going up and building costs were going up. We just had to keep trying harder to make things work out."

Despite the problems, everyone involved with the project has achieved healthy returns on their investments. And now the cranes have gone, and what was once the shell of an old workshop on Tabernacle Street is that dream home.

Pros and conversions

MISHA was a first-time buyer who hadn't managed to get a foot on the property ladder.

This looked like a great opportunity to make a start.

The owner of the building was a large investment company, but the consortium paid a good price - pounds 410,000 - for the warehouse.

The buyers paid between pounds 220,000 and pounds 400,000 for the apartments.

The entire development ended up being sold for pounds 1.5 million, which, after tax and fees, amounted to pounds 200,000 profit. Split among the consortium, it effectively doubled its investment.

Misha and Josh went to a specialist bank for their mortgage and were given 60 per cent of the value of the property, so the consortium only had to come up with 40 per cent of the building's cost.

Copyright 2002
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