Colchester - Development Loan, 1st Tier (Phase B)

Investment Summary

Overview – Investors will fund the refinancing of the CapitalRise Acquisition loan and to fund the development of 26 two-storey detached, semi-detached and terraced houses in Colchester, a town within the north of Essex.

Term – The estimated term for this investment is 21-25 months. If the loan is not repaid by the end of the estimated term, returns will accrue on investments for a further 8 months from the end of the estimated term up until the hard stop date (October 2025).

Plan – The developer will use this phase of funding to refinance the existing CapitalRise Acquisition loan and fund the development of 26 two-storey detached, semi-detached and terraced houses, five of which will be for affordable housing. The Borrower will be entitled to receive some equity release in the total facility, once the affordable units sale is formally contracted.

Location – The Site is located in Colchester, Essex. Colchester benefits from having a number of amenities in the surrounding area which are ideal for the types of end buyers of the proposed development. The area also benefits from having extensive transport connections. 

Property – The proposed site is a 3.1 acre area with full planning for 26 house dwellings.

The Developer – The Borrower is a specialist house builder who has a strong track record in delivering high-quality, luxury developments in the South East of England. They also have 25 years’ development experience and has been well known to the CapitalRise team. Being well known developer in Essex, they have procured a strong team of consultants and sub-contractors, that can deliver the right scheme for the target audience in the area. CapitalRise has been impressed with the borrower's excellent management and planning of the project throughout and now their successful exit of the project thus far.

Your Investment – CapitalRise Tier 1 and 2 investors will benefit from a First Legal Charge over the site, an unlimited Personal Guarantee of the total advance and First Ranking Debenture over the borrower. Additionally, they will also benefit from Collateral Warranties from key professionals, appointments and insurances from the consultant team and New Build warranty. Tier 1 investors will always be paid ahead of Tier 2 investors. In the event of a forced sale of the Property, CapitalRise would aim to recover all invested capital and accrued returns for both Tier 1 and 2 investors. CapitalRise would need to recover 45% of the expected market value (GDV) of the development to repay Tier 1 investors their invested capital and accrued returns. 

Exit Plan – The Borrower intends to sell 21 of the private units on the open market, with the remaining five affordable units to be sold to a registered social landlord. If a sale is not completed within the term, the borrower may seek to refinance the CapitalRise debt with another lender.