I’m building on a firm foundation

Feb 26 2008 by jez Davison, Evening Gazette

IN the second of our series profiling business leaders who champion industry on Teesside, JEZ DAVISON talks to property tycoon Raj Singh who is powering development in the care home sector with his Stockton-based business, Prestige Group

FEARS of a property crash do not worry Raj Singh in the slightest.

But then, as a lifelong Boro supporter, he’s emotionally hardened against the cycle of euphoric highs and depressing lows that characterise the real estate business.

In fact, so confident is the 43-year-old Teesside tycoon in the wealth-creating power of property that he has begun building his own - right next door to his current home in Eaglescliffe.

“If you’re shrewd enough, you’re never going to lose money in property. You just have to purchase at the right time, choose a good location and manage the properties well,” he says.

Sound investments to Raj come as easily as goals to Afonso Alvez.

But amassing a personal fortune doesn’t come without hard graft. Twelve-hour days and 5.30am starts were the norm in the early Eighties, when Raj was earning £40 per week for a double glazing firm before going on to run his father’s newsagent shop in Redcar. And when he did finally branch out on his own at the age of 24, the rookie retailer didn’t impress financiers.

“It was a tough learning curve,” he admits “Initially, I was refused a bank loan, probably because I was so young. But I knew I had to keep going because my ambition was always to have my own business.”

Raj entered the property market on the upward curve of the mid-Eighties property boom, finally securing a bank loan to purchase 54 Parliament Road in Middlesbrough town centre for £15,500. After building up a portfolio of residential properties, in 1989 he became what he describes proudly as “the youngest postmaster in Cleveland”, handling £100,000 a week after buying the post office in Victoria Road.

But it wasn’t until 1994 when he moved into the lucrative care home market - a sector he admits he knew nothing about - snapping up his first site at the former Sparks Bakery in Longlands Road, Middlesbrough, where he built his first care home, that his goal came into sight eventually led to the foundation of his £30m Stockton-based Prestige Group in 1994. Average annual yields of 5-6% over the seven years to 2003 were no mean feat for a man with no experience of the market.

“The Parliament Road purchase was the first deal I ever did on my own,” he recalls. “The post office venture was a good experience but I soon realised it was never going to make money in the long run.

“Even back in the mid-Nineties I knew that the care market would provide long-term investment opportunities - even more so now since the population is growing older and more people need looking after.”

Raj’s comments highlight his acute foresight and attention to detail. The Office for National Statistics estimates that in mid-2006 around one in six people in the UK were aged 65 or over and the average age was 39 - nearly five years older than in 1971. Care for the elderly is currently one of the UK’s - and Europe’s - most pressing concerns.

Raj has built seven homes catering for more than 350 elderly people and is working on new schemes in Darlington - where he will build a £3.7m, 67-bed home on the former site of Skerne House - and Chichester in West Sussex.

He has just secured a site in Nuthall on the outskirts of Nottingham which will eventually play host to an £11m care village including nursing care facilities, residential care homes and a day centre.

As if this wasn’t enough to keep him occupied, he has earmarked a further two sites - one in the Tees Valley - for the development of care homes and is seeking opportunities in the hotel, restaurant and leisure sectors.

Clearly, the a former pupil at Boynton School (now Hall Garth School) in Middlesbrough has lost none of his enthusiasm for the cut and thrust of day-to-day dealmaking. And with a unique foresight that allows him to spot opportunities well before anybody else, he’s looking to double the value of his £30m Prestige Group by 2010.

Raj, who also owns a 64-bedroom hotel in South Shields and a portfolio of investment properties, says: “Although I’m involved in many business ventures, I always try to find time to relax. I’ve bought a villa in Dubai which should be ready in 2010 and as well as watching the Boro avidly, I like to get out on the golf coursel.”

Raj’s advice to the next budding property entrepreneur is to have a “plan B” in place and spend cash wisely.

“I’ve seen so many companies land in trouble because they’ve spent cash they don’t have”, he says.

Raj’s smart handle on finances points to a rigour and discipline that has enabled him to get things done on time. And when he predicts that his new six-bedroom home will be ready to move into “within the next six months”, you get the feeling it will be.