SPV1011

Tamworth, Staffordshire, B78
62 Units | Sell For Profit Strategy

79.79%

Forecasted ROI

£7,429,115

of £8,153,821

Investment Term

27 months

Funded

91.11%

Investment Opportunity

JaeVee is pleased to offer the opportunity to invest equity into a residential development scheme based in Tamworth which is located close to Birmingham, UK with commuting train times around 15 minutes. The development involves the conversion of an imposing Grade II listed former mill into 51 contemporary apartments and the adjacent annex building into 11 townhouses.

The residential dwellings are a mixture of studio, 1, 2 & 3 bedroom apartments and townhouses all up to national space standards.

Based on comparable evidence and local estate agent marketing reports, the targeted GDV is £10.25m. 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 viewed when downloading the investment memorandum.

The construction costs have been priced above £1,025 per sq-m which is competitive for the local area according to BCIS Online. A 7.5% 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 between 24-27 months based on 18 months to build with a 6-9 month sales period.

The total equity investment required for this project is £724,706 with a targeted net return on capital of 79.79% which is net of corporation tax.

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Property Summary

The development, which will be a quality contemporary scheme, consists of a Grade II listed former mill and adjacent annex building that will both be converted to a high standard and in sensitive nature in keeping with the building age and features.

The residential scheme comprises the conversion of the Mill building to 51 x 1-3 bedroom apartments and the annex building will be converted to 11 x 1-3 bedroom townhouses.

The site is located by the picturesque Birmingham and Fazeley Canal and just 0.5 miles away from the popular Drayton Manor Theme Park. It's in Fazeley, Tamworth which is a large market town and borough in Staffordshire, England, 14 miles (23 km) northeast of Birmingham and 103 miles (166 km) northwest of London. Bordering Warwickshire to the south and east, and Lichfield to the north and west, Tamworth takes its name from the River Tame, which flows through it. In 2015, it had a population of 77,157.

Tamworth is the home of the historic Tamworth Castle, Church of St Editha and Moat House, and was the capital of the Anglo-Saxon Kingdom of Mercia.

The town's main industries include logistics, engineering, clothing, brick, tile and paper manufacture. Until 2001 it was also home to the Reliant car company, which produced the three-wheeled Robin and the Scimitar sports car.

The Snowdome, the UK's first full-sized real-snow indoor ski slope is in Tamworth.

With nearby amenities including public transport, shops and schools can all be found within walking distance of the development. Transport links are strong in the area as the train from Tamworth is just a 15 minute commute to Birmingham, which makes the location a good option for those commuting into the 2nd largest city in the UK. Regarding the local property market itself, over the last 5 years to January 2019 (as recorded by the House Price Index), prices have increased by 41% which represents an annualised increase of 5.12%.

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Exit Strategy

The proposed exit strategy is to sell the units on the open market. The properties will be marketed with local estate agents and we believe the target market for the properties are a mixture of first time buyers, help to buy, owner occupiers and single let landlords.

Based on sold comparables and local agent marketing reports from Bairstow Eves and Dixons, we aim to be able to sell the properties for the following prices:

Tolsons Mill Apartments 26 x 1 bed - Starting from £135,000 19 x 2 bed - Ranging from £160,000 5 x 3 bed - Ranging from £180,000 Studio x 1 - Starting from £140,000 (66.43 sq-m studio)

Tolson Mill Townhouses 2 x 1 bed - Ranging from £150,000 1 x 2 bed - Ranging from £220,000 8 x 3 bed - Ranging from £240,000

Freehold - £387,500 (Conservatively valued as £150,000 within the GDV); this is calculated at 4% yield with all 61 dwellings paying £250 per annum in ground rents.

We are already in possession of two appraisals from Dixons and Bairstow Eves which show a GDV of £10,080,000-£10,205,000 (this doesn't include the freehold value). These can be downloaded from the documents section above.

The analysis of the targeted GDV showing the sold comparables that form the said amount can be found on pages 44-49 of the investment memorandum.

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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, JA Ball.

The Principal Contractor has agreed to a fixed total contract sum of £6,045,541 which includes a 7.5% contingency in delivering the project within the set time frame of 18 months from commencement of works. A further 10% is set aside for professional fees.

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 manager who oversees the project from inception through to completion (the pre, during and post construction phases) under our appointment as Employer's Agent.

As per CML regulations, a structural warranty will be issued after the building regulations completion certificate of works. This will provide a 10 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 £10,250,000.00
Total Cost £8,153,820.95
Purchase Price £400,000.00
Stamp Duty £9,500.00
CIL £0.00
Construction Cost £5,623,758.90
Furnishing Cost £35,944.00
Professional Fees £562,376.00
Contingencies £421,782.00
Legals £20,000.00
Surveys & Searches £15,000.00
Building Regs £15,000.00
Insurance £10,000.00
Council Tax £0.00
Business Rates £0.00
Utilities £18,000.00
Senior Debt Interest £682,000.00
Mezzanine Interest £265,492.00
Sourcing Fee (1.0%) £4,000.00
Equity Raise Fee (5%) £66,968.05
Boost Fund (1%) £4,000.00
S106 £99,732.00
Gross Profit £2,096,179.05
Selling Fees -£139,200.00
Exit Fee -£72,500.00
Corporation Tax (19%) -£339,101.94
Net Profit £1,445,645.11
Net Profit Margin 17.73%
Forecasted ROI (40% of Margin) 79.79%

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 Calculator

Investment

ROI

Share Price (1%)

£18,117.65

% Share

0.28%

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

3197-SK-110 A MILL GF.jpg Site Elevation Plan 7 & 8.jpg Site Elevation Plan 5 & 6.jpg Site Elevation Plan 1 & 2.jpg Site Elevation Plan 3 & 4.jpg Second Floor Plan.jpg First Floor Plan.jpg Ground Floor Plan.jpg 3197-SK-112 A MILL TF.jpg 3197-SK-112 A MILL FF.jpg 3197-SK-111 A MILL SF.jpg 3197-SK-111 A MILL FF.jpg

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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