Duke Street is located within the vibrant marina area of the university town of Ipswich within the county of Suffolk and is a 5 minute walk to the popular Waterfront complex situated on Neptune Marina. The site is located close to the busy town centre where a variety of leading national retailers and a range of leisure activities including ten pin bowling, cinemas bars and restaurants are located. 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 8,000 students. With nearby amenities including convenience stores, cafe's, bars, restaurants and the University of Suffolk this area is popular with students. Transport links are strong in the area as the train from Ipswich is just over 1 hour into London.
The supply of PBSA supply in Ipswich has slowly increased over the years with the introduction of Athena Hall however the supply has not kept up with the demand for PBSA bed spaces. The University of Suffolk has increased rapidly in recent years with around 8,000 students currently studying, this is likely to increase further and there is already a bed to student ratio of 1:3.
This therefore creates a strong demand for our 177 bed purpose built student accommodation block.
Athena Hall is made up of a variety of different rooms which range from smaller en-suite rooms to larger studios. The rental figures for Athena Hall which is the best comparable to use for our student scheme, ranges from £127.20 - £174.76 per week depending on size and room types. We have estimated £135 per week when determining the annual rent of £1,194,750 therefore meaning it is inline with the market student room rental rates. The Head of Estates at the University of Suffolk has expressed that they are nearing capacity at their existing accommodation and that this development would appeal to a number of students.
The exit strategy for this project to sell the Purpose Built Student Accommodation (PBSA) block on the open market with the target demographic being investment and pension funds. The profits generated from the sale of the block will then be used to repay equity investors their initial investment and targeted return of 101.98%.
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 £7,329,600 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 procure sub-contractor packages 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 in-house 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. The cost of this is covered via the allocated professional fee fund.
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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