Colchester - Development Loan - Tier 2 (Phase A)

Investment Summary

Overview – Investors in this opportunity and future phases will continue to fund the development costs of  26 two-storey detached, semi-detached and terraced houses in Colchester, a town within the north of Essex. In Tier 1, CapitalRise investors funded the refinancing of the CapitalRise Acquisition loan and some of the development costs.

Term – The estimated term for this investment is 17-21 months. If the loan is not repaid by the end of the estimated term, returns will accrue on investments for a further 9 months from the end of the estimated term up until the hard stop date (November 2025).

Plan – The Borrower will use this phase of funding to 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 Borrower – The Borrower is also the Developer of this project and is a specialist house builder with 25 years development experience in the South East of England.

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. Investors in this tier, Tier 2, will be paid after Tier 1 investors in exchange for a higher return to reflect the increased risk. If the borrower is unable to repay the loan, CapitalRise will seek to force the sale of the properties on behalf of investors. If sufficient sales are achieved, the value would need to be less than 67% of the anticipated market value before Tier 2 investors invested capital and accrued returns are at risk.

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.