Regulated Business

SPV1005

Norwich, Norfolk, NR1
41 Units | Sell For Profit Strategy

109.86%

Targeted ROI

£8,768,515

of £8,909,610

Investment Term

24 months

Funded

98.42%

Investment Opportunity

This investment offers equity investors the opportunity to invest into a residential development scheme comprising 41 residential dwellings located on the riverside in Norwich City, UK. The planning consent (REF 15/01810/F) and listed building consent (REF 15/01811/L) permits the development which also includes 21 parking spaces.

The site is the last remaining waterfront development located directly opposite Norwich's popular leisure and retail riverside complex.

The residential dwellings are a mixture of 1 - 4 bedroom apartments and townhouses, all up to national space standards.

The forecasted GDV is £11,125,000 with a senior debt facility of £8,343,515 (including interest). The site has been acquired for £1,200,000 which represents 10.78% of the GDV, thus being well below the ceiling price of 25%. Due to acquiring the site for 10.78% of the GDV, it means that additional targeted profit goes into the development returns hence the forecasted return on equity is uncommonly high.

The construction costs have been priced at £1,400 per sq-m which when taking into account an additional 10% contingency for construction costs and 10% for professional fees, makes the costs above BCIS Online for the local area. These numbers are detailed within the feasibility study below.

The proposed investment turnaround time is 24 months which is based on 12-18 months to build with a 6-12 month sales period. The sales strategy is to put the properties on the market 6 months before completion of the construction. As the construction is expected to begin in September 2019 the units will be put on the market between September, 2020 and March, 2021.

The current GDV is determined by using sold comparables for similar properties in and around the local area (typically within 1/2 mile radius) which have sold in the last 12 months. Details of the sold comparables we have used can be seen when downloading the Investment Memorandum.

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Property Summary

The scheme, benefits from planning permission for the redevelopment of the Grade II listed former public house and a ground up residential block centred around a communal courtyard and 21 allocated undercroft car parking spaces

The former public house will be refurbished to create 2 residential dwellings comprising 1 x 1 bedroom unit and 1 x 4 bedroom unit. The newly constructed dwellings will comprise 6 x studio apartments, 7 x 1 bedroom apartments, 21 x 2 bed apartments, 1 x 3 bed apartment. In addition to the apartments, there will also be 1 x 3 bedroom townhouse and 2 x 4 bedrooms townhouses.

The development is located adjacent to the River Wensum and has been designed in a way to ensure that the majority of apartments benefit from river views. It is also a stone's throw from Norwich’s popular riverside retail & leisure development and the home of Norwich City Football Club. It is also situated less 0.5 miles of the city centre, less than 0.5 mile away from Norwich railway station and is close to Norwich’s inner ring road which gives convenient transportation access around the city.

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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 are able to target this additional market.

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

1 bed flats - £195,000-£210,000, 2 bed flats - £264,000 - £316,000 and 3 bed flats - £388,000 -£398,000
3 & 4 bed townhouses £450,000 - £510,000

*These sales estimates have been supported by a development sales appraisal report from two estate agents based in Norwich, one of which you can download via the documents above.

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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 £5,065,263 (with an additional 10% 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 UK Finance regulations, a structural warranty will be issued after the building regulations completion certificate of work. This will provide a 10 year structural warranty which is a mandatory UK Finance requirement for mortgage lenders to be able to lend on each dwelling.

The Property Developer will also be uploading monthly construction 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 £11,125,000.00
Total Cost £8,909,609.87
Purchase Price £1,200,000.00
Stamp Duty £49,500.00
CIL £332,457.00
Construction Cost £5,065,263.06
Furnishing Cost £10,000.00
Professional Fees £506,526.31
Contingencies £506,526.31
Legals £20,000.00
Surveys & Searches £10,000.00
Building Regs £10,000.00
Insurance £5,000.00
Council Tax £0.00
Business Rates £0.00
Utilities £20,500.00
Senior Debt Interest £891,966.00
Mezzanine Interest £205,200.00
Sourcing Fee (1.0%) £12,000.00
Equity Raise Fee (5%) £52,671.19
Boost Fund (1.00%) £12,000.00
S106 £0.00
Gross Profit £2,215,390.13
Selling Fees -£144,000.00
Exit Fee -£151,966.00
Corporation Tax (19%) -£364,690.58
Net Profit £1,554,733.55
Net Profit Margin 17.45%
Targeted ROI (40% of Margin) 109.86%

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

Targeted ROI

Share Price (1%)

£14,152.38

% Share

1.41%

All the above figures are targeted 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.

How do we mitigate risk?

Documents

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Location

Proposed Plans

Upper Ground Floor.jpg First Floor.jpg Fourth Floor.jpg Third Floor.jpg Second Floor.jpg Car Park (Lower Ground Floor).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.