Companies offering alternative investment options often have a similar modus operandi. They usually conduct their preview sessions in swanky 5-star hotels, provide free lunch or high tea and a free gift such as shopping vouchers to sweeten the deal. This was our experience when we were invited for a preview investment session with Jardin Smith International. Read on for our experience and to learn if these land banking companies are scams.
Investing in Land Banking
What’s the investment vehicle Jardin offers? Land.
But here’s the catch, the land isn’t in Malaysia or Asia but rather it is in the United Kingdom. Drawing similarities from Donald Trump and Li Ka-Shing, their marketing pitch encourages you to consider investing in land for it is the most stable and risk-free asset in today’s volatile world.
Jardin Smith basically sells sub-divisions of empty land in UK to international investors in a scheme popularly known as land banking. Their business is based on the potential of the land increasing exponentially in value once planning permission has been given by the UK local council in 6 to 8 years. According to them, even if that does not materialise, land continues to appreciate at a steady 12% per annum which makes it a more profitable investment compared to many others.
Risks In Land Banking
Minimal, according to Jardin Smith. However, if you are a careful investor, you might be concerned about the existence of the land in such a faraway country. Jardin allays your fears by providing you an individual sub-divided title for that plot you own. This allows you to sell it back to Jardin but not to any other third party. They also claim to have engaged some of the best planning experts in UK to expedite the planning approval process so the land value increases faster and they (holding 25% of the land) together with their investors can exit faster.
Is Land Banking A Scam?
There have been many recent reports about land banking being yet another investment scam. It does sound almost too good to be true as they promise profits of over 100% in just a few years. However, when pressed, Jardine Smith International is often ready to offer documentary evidence for most of the questions you ask for.
If uncertain, I would advise that you do your own due diligence on the company prior to investing. That way, you will be able to make a calculated decision after weighing all necessary risks and benefits. Land banking investment isn’t for everyone. It involves tying up a rather large sum of money (usually around GBP10,000) for at least 8 to 10 years. Do also be careful of the fact that UK Land Laws are very different from our local laws and we may not be well informed enough about them.
Ultimately, it is your choice but before you consider investing, engage independent land surveyors and solicitors to provide you with an independent view. They will rush you with the promise if huge discounts by signing up on that day itself but take your time to ensure you make an informed investment instead of getting swayed by the high returns and running in headfirst.
August 28th, 2009 at 5:53 pm
Awesome job! I was looking for review on Jardin Smith International. Thanks.
October 7th, 2009 at 12:30 am
“land continues to appreciate at a steady 12% per annum which makes it a more profitable investment compared to many others”
This is clearly not true. If all land increased at a steady 12% there would be no need for any other investments. Jardin Smith offer land that is mainly protected land under UK law and very difficult to gain conversion to building land. Do not accept generalisations. There is a a lot of useless investment land in the UK so make sure you arent buying it at a highly inflated price.
October 14th, 2009 at 11:18 am
Hi Stephen – It was for this reason that I opted not to consider the land investment scheme. There are just too many unanswered questions.
October 25th, 2009 at 9:46 pm
Well, what if the company is really meant to do business and is legal business, wouldn’t this post of yours a defamation??
October 26th, 2009 at 10:34 am
Hi Daniel – Well, it does not hurt to highlight that there are lots of land banking scams out there together with other financial scams. I did not run down JSI but merely warned people to be careful and to understand all details before entering into any investments.
July 9th, 2010 at 7:40 pm
Here is a link that covers the formal response and official status of two UK Jardin Smith sites at Water Orton and Shrimps Field
http://www.whatdotheyknow.com/request/plank_lane_water_orton_status
I think it is fair to say it is not positive for Jardin Smith
September 6th, 2010 at 4:08 pm
Jardin Smith are currently offering a site called Gerrards Cross via the normal drinks and food sessions in posh Singapore and KL hotels.
Here is the officail status on Gerrards Cross from a lawyer working for the UK authority.
http://www.whatdotheyknow.com/request/status_of_land_in_gerrards_cross
To summarise the points made
The land is protected green belt
The local authority has allocated building land through until at least 2026 so does not need to develop in the green belt.
The council will defend the Green Belt.
They give this comment on their website
“Please give serious consideration to the above points before purchasing any plots advertised as an investment opportunity. It is likely that they are not.”
In addition the UK land registry say the land is being registered by those wishing to “buy a piece of britain” not as potential building land.
It would seem that at some of these hotel sessions Jardin Smith are offering a “free” Apple Ipad to those that sign up for this land . It seems likely that the IPad will turn out to be worth more than the land so perhaps the offer should be free land with a very expensive IPad.