The best sustainable property investment today! 12% pa return secured!

by Karen Skehel
(London UK)

St Georges, St Margaret's, Kent

Summary

This investment opportunity provides a 12% annual return with the equity being secured against an existing property asset. The equity is for a new build housing development

Investors can invest a minimum of £20,000 with a total of £200,000 being required

£200,000 is required as initial equity by the end of September 2013 and for a period of 15 months and will be secured by way of a second charge on an existing block of residential units. The land to be developed is in front of this block of residential units, with the block itself being extended as part of the development project.

The equity is required to enable exchange of contracts on the development site. Normally this is the most risky equity and it is unusual to offer a second charge. In this case a second charge is being offered on the existing properties and this second charge is in place during the life of the deal to protect the investors.

The investment is thus secured by way of this charge

The equity will be returned in 15 months time with annual return payments of 12% being paid in Sept 2014 ( £6,000 for each £50,000 invested, and £12000 for each £100,000 invested) and a further payment of 12% in Dec 2014 pro rata .

The equity return will be provided from income generated out of property sales from the development. There has already been interest in the property sales!

The second charge on the existing property will have a value of at least 1.25 times the equity invested

Project

The project is to develop 29 new homes, as a mix of houses and flats. The development is an advanced green project which will benefit from the use of the ‘Beattie Passive’ passivhaus building system, which deliver’s green buildings without a cost premium.

This development is located in a pleasant and prosperous part of East Kent, St Margaret’s at Cliffe which is an affluent community, benefitting from excellent views of the English Channel. Former residents include Noel Coward, Sir Peter Ustinov and Ian Fleming. The site is a short 3 min walk to the village centre where there are shops, pubs, and other amenities including a community centre.

The land is being sold by a local Trust, which owns a number of properties in the village, and which has a core focus on environmental education. It has selected Pete Halsall as the lead developer on the basis of his track record in green development projects and wider market reputation, and hence his ability to deliver a green profitable venture.

Planning permission is being applied for with a planning pre applications document having been submitted to Dover District Council (the planning authority) in late July. Once this has been commented on and discussed with the council then a detailed planning application will be made in late September and with receipt of planning permission expected by late November. Construction is scheduled to commence in early January 2014, with overall completion scheduled for late January 2015.

The Trust has agreed to sell the land to a joint venture company that Pete Halsall will set up, at a fixed price. The land contract, which it is planned will be completed in September, will require a deposit of £200,000, with the remainder of the land payment being due during the project as well as on a deferred basis, i.e out of property sales.

Development programme - timescales

It is anticipated that once planning permission has been granted, the development will require 13 months to construct. The sales process will be commenced 5 months after the commencement of construction with the opening of a show house. The total of 29 new homes will include 22 for sale units and 7 affordable units, the latter sold to a housing association. The sales rate anticipated for the development of private sale units is 1.5 per month, so that a total of 15 months will be required to sell the units. This gives an overall sales completion of 8 months after completion of construction, so that:

- Construction commencement - early Jan 2014
- Sales and marketing commencement June 2014
- Construction completion - end Jan 2015
- Sales and marketing completion - end of Aug 2015

Sales will be made on properties - including a sale to a housing association and this is the source of income from which the investors are paid back

Pete Halsall

Pete Halsall is a very experienced developer with over 30 years in the property and construction industry. As former MD of BioRegional Quintain (a public company) he led the development of a sustainable development business that was the industry's leading green developer. He is CEO of Beattie Passive, chair of the Good Homes Alliance and advises the board of Lafarge Tarmac as well as being on low impact buildings committee of the Technology Strategy Board. He is highly regarded and has a high profile as a developer: He was described last year by Building magazine as the UK's most committed green builder

Beattie Passive

The Beattie Passive build system delivers ‘Passivhaus’ levels of energy performance - so that the average cost to heat a Passivhaus home would be £150 per year - at the same cost as normal construction costs. It is a fast build system that presents no risk to the development costs nor the construction programme.

The homes that the system will produce are highly attractive to buyers given that the energy costs will be so low.

Project financing

The project will be financed by virtue of a loan for the construction works and the sale of a small portion of housing to a housing association. The deferment of half of the land cost - so that the land owner is paid out of sales receipts from the properties - reduces the funding that is required.

Project Risks

Key project risks are as detailed under:

- Planning permission is not achieved:

This risk is very unlikely given that the development of the site is included within the local neighbourhood plan.
If planning is not secured then the investment is secured on an existing income producing property

- Development income is not sufficient to pay back the investors.

The level of cover for the investors is very high so that the project income is secured - at the very least by sales to a housing association

- Construction cost overrun

The development will be built using a building system that relies on standard and readily available building materials, giving a predictable construction cost

Legal fees

We will pay the reasonable legal fees of the lead investors advisor in commenting on and negotiating the investors agreement

If you would like to find out more and express your interest, in the first instance, please contact



Karen Skehel


020 8748 1342 or via [email protected]

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