Acquisition of distressed properties in Detroit nets Hobbs’ firm €1.2m

The investment firm set up by consumer advocate Eddie Hobbs has recorded an immediate €1.2m gain from its investment in one of the least fashionable addresses in the US — Detroit.

The €1.2m gain from the purchase of distressed residential properties in the Detroit region contributed to pre-tax profits at Hobbs’ Brendan Investment Pan European Property rising 14-fold to €888,863 in the 12 months to the end of 2012. This followed a pre-tax profit of €60,562 in the 11 months to the end of December 31, 2011.

According to the directors’ report attached to the Cork-based firm’s accounts, the distressed US properties were purchased in 2012 by the group’s US investment entity, Artesian Equities. The cost of the acquisition was €4.56m.

The report states the directors “are satisfied with the investment strategy engaged in during 2012 and with the financial performance for the year and the balance-sheet positions at year end”.

The figures just lodged with the Companies’ Office show net rental income in 2012 dipped from €1.44m to €1.32m, chiefly as a result of rental expenses almost doubling from €91,073 to €171,183.

Administrative expenses increased by 10% from €676,435 to €744,800.

The firm’s performance was also boosted by a profit of €118,874 on the sale of investments; a profit of €36,000 on the sale of fixed assets and other operating income of €149,984.

The €118,874 profit relates to a sale of a joint venture project involving the development of a hotel property in Germany that was completed in January 2012.

The group’s net assets increased in 2012 from €8.8m to €9.35m.