38-62 Yeoman’s Row, Knightsbridge

38-62 Yeoman’s Row, Knightsbridge, London

Investment Highlights

Forecast Annual Return 10% (paid at the end of the loan term)
Estimated Term 13 months
Expected Total Return
11% (assuming a 13 month period of investment)
Mininum investment £ 1,000
Amount Being Raised £ 1,000,000
Product Type Debt

The expected total return is a forecast based on the estimated term and is not guaranteed. Past performance of previous projects is not indicative of future results for this project.

Investment Summary

  • Developer – YRPL is a joint venture between Finchatton and another developer, both specialists in the development of luxury residential property in prime central London.
  • Location – Yeoman’s Row is in Knightsbridge and connects Brompton Road to Walton Street and lies some 300m west of Harrods.
  • Property – The property is a new build development of five townhouses and four apartments. The scheme benefits from underground parking and will be fully serviced by an on-site concierge once complete.
  • Pricing – £27m of pre-sales have been secured to date at an average of £3,300 per square foot. This is in excess of the levels stated in the professional valuation report for the project (£3,288 per square foot).
  • Protection – When the pre-sales complete, YRPL's borrowings will be 47% of the value of its remaining properties.The property would have to fall in value by 39% or more for any of your invested capital and accrued return to be at risk. Benefits from the security of a second legal charge over the property.
  • Investment – The investment is forecast to receive a return equivalent to 10% per year compounded annually, paid at the end of the investment term.

Returns Calculator

Return - Forecast annual return of 10%

Investment amount

Return accrues

You Invest

Nov 2016
Nov 2017
Dec 2017

Total Return

On original Investment of

Note: These returns are an indication only and are not guaranteed. Your capital is at risk and you may not get back the money you invest.

The Plan

  • The developer acquired the property as a cleared site in July 2012 and obtained planning consent for a 42,000 sqft development comprising five townhouses and four apartments.
  • The building is almost finished with practical completion forecast by early 2017. Therefore there is minimal construction or development risk because the property is only months from completion.
  • Your Investment will be used to partially refinance an existing £2.8m bond issued by the developer.
  • The developer has already pre-sold one townhouse and all four apartments.
  • At the point the pre-sales complete, YRPL’s borrowings will stand at 47% of the value of its remaining properties.
  • The four remaining townhouses will be launched for sale in early 2017.
  • If they achieve forecast sale prices, the sale of three of these four townhouses will generate sufficient proceeds to redeem your capital and deliver the return.

Timeline

property purchased Aug 2013
works commence Jul 2014
Works complete Aug 2015
Sep 2015
Used as show flat
Sales launch Dec 2017
property sold may 2018

Dates are for guideline purposes and may vary

Financials

FUNDING STRUCTURE
- AT INVESTMENT

Value
% of Value
£1m from CapitalRise investors & £1.8m from an existing investor. Investors will be repaid 2nd. After the bank but before the developer.

FUNDING STRUCTURE
- AT EXIT

Value
% of Value
The post development property sales value would have to be more than 39% less than the anticipated sale value for your invested capital or accrued interest to be at risk. The developer would have to absorb up to £41.3m of loss before you would be impacted.
£1m from CapitalRise investors & £1.8m from an existing investor.
Investors will be repaid 2nd. After the bank but before the developer.

Investment Structure

  • The property is owned by YRPL, a joint venture between Finchatton and another developer, both specialists in the development of luxury residential property in prime central London.
  • The property is being funded by a combination of bank debt and bonds. A bond is a debt investment in which an investor loans money to a company. A new subsidiary company of CapitalRise, 38 YR plc, has been incorporated to issue bonds to investors. 38 YR plc will use the proceeds of these bonds from investors to partly refinance the existing bonds that have been issued by the developer.
  • 38 YR plc will not carry on any other commercial activity. The directors of this company will (through CapitalRise) administer and enforce the terms of the bonds issued by 38 YR plc.
  • The investment is structured as deep discounted bonds. The bonds will be issued at a discount to the nominal amount and (if sufficient proceeds are generated from the sale of the property) at the point of redemption of the bonds, investors will receive proceeds equal to the issue price of the bonds and a return equivalent to 10% per annum, compounded annually.
  • 38 YR plc is the beneficiary of a second legal charge over the property. In any forced sale of the property, the holder of the first legal charge will recover its investment first.
  • 38 YR plc is not required to withhold UK income tax on this investment and so returns will be paid gross. Income tax may be payable by investors on any return on the investments; Investors should take their own tax advice from an appropriately qualified professional.

Risks

As with all investments you should carefully consider the key risks involved which include:

Risks Mitigation
Liquidity risk – You need to be prepared to hold this investment for the full term. We can help you to try to sell your investment if you want to exit early but this may be difficult and a sale is not guaranteed. There is a company which may be willing to purchase bonds from bondholders who wish to achieve an early exit. However it would not be possible to guarantee that such purchases would take place at a particular price and the price achieved is likely to be at a discount.
Capital & income risk – Your capital is at risk and the income is not guaranteed. 38 YR plc has the benefit of a second legal charge against the property which means that in the event that the developer cannot repay your capital and accrued return, the investors may be able to force the sale of the property. However, the outcome is uncertain and there is a risk that you may not recover the full amount due. The bank loan is secured against the property with a first legal charge so in any forced sale of the property, the bank will recover any amounts due to it first.
Market risk – If the market for central London residential property deteriorates, it may not be possible to sell the property at the price currently projected and/or there could be delay in the sale. The property value would need to fall by 39% in order for your capital and accrued return to be at risk.
Construction risk – Construction works to the property may be delayed by events outside the control of the developer such as contractor insolvency or mismanagement. The works are due to be complete by early 2017, so the build programme has only a few months left to run. Any potential delays would therefore be unlikely to be material in the context of the term of the investment.
Compensation scheme – The Financial Services Compensation Scheme does not cover poor investment performance. You cannot claim compensation if your investment does not perform as expected, unless it results from us or Gallium not discharging our obligations to you. The FSCS would cover amounts owed to our customers in the event of our insolvency, up to a maximum of £50,000 per customer.

Location

  • Yeoman’s Row lies in the heart of Knightsbridge, some 300m west of Harrods.
  • This quiet street connects Brompton Road to Walton Street which is being transformed by the Brompton Cross Estate to attract luxury retail brands including Chanel.
  • Hyde Park and the amenities of Knightsbridge, including Harrods, Harvey Nichols and a variety of boutique shops on Beauchamp Place, are nearby.
  • The Hawksmoor restaurant is located in Yeoman’s Row, and other gourmet restaurants are to be found in the surrounding area.
Address
38-62 Yeoman’s Row, SW3 2AH
City
London
Nearest stations

South Kensington (0.4 mi)

Knightsbridge (0.4 mi)

Sloane Square (0.5 mi)

Comparable Properties

In Knightsbridge

Sales values in £ per square foot

Data source: Savills Valuation Report

The Developer

Overview

  • YRPL, the developer, is a partnership between Finchatton and another developer, in which Finchatton acts as development co-ordinator.
  • Finchatton is a leading luxury residential specialist.
  • Established in 2001, Finchatton has delivered over 120 projects in excess of £1 billion Gross Development Value.
  • Finchatton has a dedicated and creative team of 40 professionals operating out of Chelsea, London. Some shareholders in Finchatton are also shareholders in CapitalRise.

Contact



Adam Hunter

Directors

Deal Room

Documents

Valution report

Budget

Estate Agent's view

BOND T's & C's

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Capital at risk. Interest not guaranteed. See key risks.