SPV1004

Ipswich, Suffolk, IP3
46 Units | Sell For Profit Strategy

75.20%

Forecasted ROI

£7,286,349

of £7,465,957

Investment Term

24 months

Funded

97.59%

Investment Opportunity

This equity investment offers investors the opportunity to invest into a residential development scheme comprising 44 residential dwellings and 2 retail units.

The residential dwellings are a mixture of 1 & 2 bedroom apartments all up to national space standards.

We're working towards a conservative forecasted GDV of £9,160,000 though Aitchison Raffety, an independent surveyor appointed by the senior debt lender, has confirmed a GDV of £10,000,000 on the 20th of January 2019. When determining a GDV, one uses sold comparable for similar properties in and an around the local area typically within 1/2 mile radius. Details of the sold comparables we have used can be seen when downloading the investment prospectus.

The construction costs have been priced at £1,200 per sq-m which is competitive for the local area according to BCIS Online. A 5% contingency fund has also been added on top along with a professional fee fund of 10%. These numbers are detailed within the feasibility study below.

The proposed investment turnaround time is 24 months based on 18 months to build with a 6 month sales period. The development programme detailing the 18 months to build is available to download in the Documents section above.

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Property Summary

The development, which is a high quality contemporary scheme will be made up of three separate blocks:

Block 1 comprises 16 units Block 2 comprises 22 units; and Block 3 will comprise 6 units.

The one bedroom apartments will comprise entrance hall, lounge/kitchen, bedroom with built in wardrobe and separate bathroom. The two bedroom apartments will comprise entrance hall, lounge/kitchen, 2 bedrooms, master bedroom with en-suite, built in wardrobes and separate bathroom.

Duke Street is located close to the centre of the busy town of Ipswich. Ipswich is home to Ipswich Town Football Club, the town centre where a variety leading national retailers can be found. There is also a range of leisure activities including ten pin bowling and cinemas. The site is also located close to the popular Marina complex and is ideally located for University of Suffolk which opened as recently as 2007 and already accommodates circa 5000 students.

With nearby amenities including convenience stores, cafe's, bars, restaurants and the University of Suffolk make this area popular with students and young professionals. Transport links are strong in the area as the train from Ipswich is just over 1 hour into London, which makes the location a good option for those commuting into London. Regarding the Ipswich property market itself, over the last 5 years (as recorded by the House Price Index) prices have increased by 44.1% which represent an annualised increase of 8.82%. To break it down further, over the last 3 years 23.5% growth and the last one year 3.5%.

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Exit Strategy

The proposed exit strategy is to sell the units on the open market, with sales expected to begin 6 months before the completion of the construction works using an on-site furnished show apartment.

The apartments will be marketed with local estate agents, with the target market being a mixture of owner occupiers, first time buyers and single let landlords. As the developer is registered with Help to Buy, we're are able to target this market as well.

Based on sold comparables we expect to be able to sell the properties for the following prices:

2 bed flats - £230,000 each and 1 bed flats - £170,000 each.

These sale estimates have been supported by a development sales appraisal report from two estate agents based in Ipswich, Connell's and Haart. They have been further supported by a desktop survey conducted by Aitchison Raffety on the 20th January 2019 advising the 2 bed flats to be worth £250,000 and the 1 bed flats £175,000.

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Operational Delivery

With all JaeVee development projects, the SPV (in its role as the client) enters into a JCT 2016 design & build construction contract whereby the responsibility in delivering the project rests with the Principal Contractor.

The Principal Contractor has agreed to a fixed total contract sum of £4,295,200 (with an additional 5% contingency fund and 10% professional fees fund) in delivering the project within the set time frame of 18 months.

As the Principal Contractor is holding the design and build contract, it will select the sub-contractors to assist in delivering the project. The SPV has the right to request copies of the JCT subcontractor contracts which will be taken care of by JaeVee's inhouse project management team. This forms part of JaeVee's role as Employers Agent, overseeing the project from inception through to completion (the pre, during and post construction phases) assisting the property developer throughout.

As per CML regulations, a professional consultants certificate (also known as an architects certificate) will be issued after the building regulations completion certificate of works. This will provide a 6 year structural warranty which is a mandatory CML requirement for mortgage lenders to be able to lend on each dwelling.

The Property Developer also will be uploading updates to the JaeVee system throughout the duration of the project thus allowing investors to see the progress in real time.

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Development Team

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Financials

The following financials are calculated against our Sell For Profit model.
Gross Development Value £9,160,000.00
Total Cost £7,465,806.52
Purchase Price £1,350,000.00
Stamp Duty £49,500.00
CIL £0.00
Construction Cost £4,295,200.00
Furnishing Cost £0.00
Professional Fees £429,520.00
Contingencies £214,760.00
Legals £10,000.00
Surveys & Searches £5,000.00
Building Regs £5,000.00
Insurance £500.00
Council Tax £0.00
Business Rates £0.00
Utilities £12,000.00
Senior Debt Interest £850,869.00
Mezzanine Interest £171,000.00
Sourcing Fee (1.0%) £13,500.00
Equity Raise Fee (5%) £45,457.52
Boost Fund (1%) £13,500.00
S106 £297,098.00
Gross Profit £1,694,193.48
Selling Fees -£143,520.00
Exit Fee -£82,342.00
Corporation Tax (19%) -£222,534.36
Net Profit £948,699.12
Net Profit Margin 12.71%
Forecasted ROI (40% of Margin) 75.20%

What happens next after investing?

  1. Your funds will be held in trust by MangoPay until the total raise is achieved
  2. Once the total raise is achieved, the funds will be automatically transferred to the SPV bank account
  3. The shareholders agreement is issued for signature (electronically)
  4. Once signed by all parties, the development agreement is issued for signature by the developer (electronically)
  5. Once the development agreement is signed, shares are issued in the SPV
  6. Project commences
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Further Information

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Investment

ROI

Share Price (1%)

£12,615.20

% Share

0.40%

All the above figures are forecasted and subject to taxation based on personal circumstances. Corporation tax has been taken into account, based on a rate of 19%. Capital at risk: before investing please read the risk warning.

Documents

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Location

Proposed Plans

0 - Ground Floor.psd.jpg Site Plan.jpg 4 - Fourth Floor.jpg 3 - Third Floor.jpg 2 - Second Floor.jpg 1 - First  Floor.jpg Elevation (4).jpg Elevation (3).jpg Elevation (2).jpg Elevation (1).jpg

Team Behind It

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Investing in JaeVee involves risk, including loss of capital and illiquidity and it should be done only as part of a diversified portfolio. Investments made through JaeVee are not covered by the Financial Services Compensation Scheme (FSCS). Please read our full risk warning before deciding to invest.

Capital at risk. Read more