Grant opts for Sandstone as new REIT venture unfolds

Based in Scotland with 2,000 properties throughout the UK, the company now known as Sandstone focuses on handling buy-to-let housing targeted at university students and young professionals. What began when Mr Grant and his former wife Colette bought a single run-down house in Edinburgh has grown to managing £500 million of property owned by clients from 40 countries around the world.

“The name was given to us by our tax accountant who said early on, ‘For the purposes of this meeting, can we call the company Grant Property?’, and the name stuck with us for 25 years,” he said.

He took sole control of the business two years ago after buying out his ex-wife’s 50 per cent stake. He manages operations remotely from the US state of Utah, where he has lived for the past six years.

READ MORE: Glasgow and Edinburgh targeted by homes for rent investors

“I love skiing and grew up in Aviemore, so I decided to come to the United States because the snow here is awesome, and the mountains are bigger,” he said.

In addition to the name change, the company is also preparing to launch a real estate investment trust. Known as the Sandstone REIT, it is expected to be listed on the International Stock Exchange based in Guernsey from later this month with an initial four properties.

The aim, Mr Grant says, is to provide an alternative to investors who don’t want to purchase property outright. This should appeal to smaller investors who don’t have “£100,000 for all the things the bank won’t lend on”, and will also give existing clients the option of selling their properties into the REIT.

REITs focused on commercial property – which make up the vast majority in the UK – have been beset by various crises in recent years, the latest being the uncertainty in the retail and office sectors triggered by lockdown restrictions to control the spread of Covid. Mr Grant says that residential REITs are “a different animal”, as people need places to live even in times of extreme trouble.

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“It has more stabilisers built into it as an asset class – that is the way I like to put it,” he said.

Having done a degree in business studies in Aberdeen, Mr Grant began his career as a sales representative for a local newspaper group. He moved into circulation management and changed locations frequently through the years as he worked with a variety of publishers, buying run-down properties and fixing them up at each stop along the way.

“I used to make more money from that than I ever did from working,” he recalls. “When it came time to move I would sell at a profit. That kind of gave me the bug.”

His biggest setback since getting into property full-time was the financial crash of 2008/09, when the business was forced to downsize from about 140 to 50 members of staff. A joint venture with the Bank of Scotland – the management of a £100m fund to help institutions invest pension money in residential property – ran aground with the bank’s collapse.

At that point the focus shifted heavily towards working with overseas investors who were not crippled by the financial fall-out from the banking sector crisis. Partnerships were struck in various countries in the Middle East and Asia, working with wealth managers, mortgage brokers and the like to channel in the money of clients keen to invest in the UK.

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Going forward, Mr Grant expects those partnerships will evolve from facilitating individual property purchases to become more focused on the Sandstone REIT.

To further this goal in the Asia Pacific region, Sandstone announced the appointment earlier this year of a new strategic advisor based in Singapore. A GlobalScot and founding member of the Singapore Scottish Business Association, Simon Lints has worked in senior positions with JP Morgan, Saudi International Bank, Strathclyde Pharmaceuticals, UBS and Credit Suisse, and was most recently chief executive of Schroders Wealth Management business based in Singapore.

“I’ve known Peter and his team for many years so am delighted to take on this advisory role,” Mr Lints said. “Sandstone has been borne out of an established property and investment business in the UK and with a focus on the opportunities with the APAC market, it’s an exciting time to join.”

Since the financial crash, Sandstone has rebuilt to employing 75 people across 10 UK offices, with annual profits in the region of £2m. Considering the switch to working from home during the pandemic, Mr Grant said there may not be need for physical offices in every location that currently has one, though “we will certainly need people on the ground in all of those cities”.

As for the “ultimate business journey”, he said that would “surely be” to build an organisation that is ultimately listed on the public market: “I would love to be in a position in two or three years’ time to be able to float the business.”

Q&A

When you were a child, what was your ideal job? Why did it appeal?

I wanted to fly a rescue helicopter, as the used to refuel in the field opposite my house. As a kid I had to make do with stacking shelves, washing dishes in a restaurant, and counting laps on a go kart track in Aviemore. But then again, I was only 10.

What was your biggest break in business?

Getting fired as a director from Mirror Group!

My fifth managing director in three years wanted to bring his own team in, and so I got paid a lot of money to go quietly (and not sell my story to The Sun).

I used the money to start Sandstone, 25 years ago.

What was your worst moment in business?

Getting fired from Mirror Group. I was devastated.

Who do you most admire and why?

Sir Tom Farmer. He is someone from my back yard, who started from pretty much nothing. And sold his business for £1bn. Now that’s impressive!

What book are you reading and what music are you listening to?

Favourite group of all time has to be the Eagles. Favourite book is How To Win Friends and Influence People by Dale Carnegie.