Sydenham Hill, South London, Tier 1 (Phase B)

Investment Summary

OVERVIEW – Investors in this Phase (and future phases) will fund the development costs of the new four-storey residential block, which will contain 9 apartments (referred to as the Property going forward). The Property is situated within the desirable location of Sydenham Hill which sits between Dulwich and Crystal Palace, South East London.

TERM – The estimated term for this investment is 17-23 months. If the loan is not repaid by the end of the estimated term, returns will accrue on investments for a further six months from the end of the estimated term up until the hard stop date (August 2025).

PLAN – The developer initially acquired the site several years ago with a bridge loan from another lender, but then repaid that loan and owns the site unencumbered. The developer has already started works on the site and will now use the CapitalRise loan to complete the development. As part of the loan, CapitalRise partially refinanced the Borrower for some of the acquisition costs and the initial development costs. Despite the partial refinance the Borrower will retain a significant portion of their own equity in the deal. Full planning permission has been approved for the construction of a three-storey, plus lower ground floor, residential building. The development will include 9 apartments including a penthouse.

LOCATION – The Property is located on the residential Sydenham Hill in the London Borough of Southwark. The Property lies between Dulwich and Crystal Palace and is well served by local shops, cafés and other local services. A number of outdoor spaces are in close proximity, including Dulwich Wood, Sydenham Wells Park, and Crystal Palace Park. 

PROPERTY – The proposed Property will consist of 9 apartments including a penthouse in a single building spread across three storeys and a lower ground floor. The ground floor flats and penthouse are three beds with the remaining flats being two beds. Each flat has a private outdoor space/balcony, and they share a rooftop terrace. The Property will be finished to a high standard with premium materials used throughout.

THE BORROWER – This Property is being developed by the Edition Group which operates as a consortium of architect-led companies within a single organisation that acquires, designs, and builds new residential projects in London and the South-East. They have a strong reputation in South East London and have completed and sold a scheme on the same road. The Borrower has had their own Architectural firm for 20 years and one of their first projects won the RIBA prize for London’s best housing.

YOUR INVESTMENT –  CapitalRise investors will benefit from a First Legal Charge over the property, a Personal Guarantee limited to 25% of the total advance plus a cost overruns guarantee, and First Ranking Debenture over the borrower. CapitalRise Tier 1 investors will always be paid first and Tier 2 investors will be paid second. In the event of a forced sale of the Property, CapitalRise investors would recover their investment first and if the borrower is unable to repay the loan, CapitalRise will seek to force the sale of the Property on behalf of investors. If sales are achieved the value would need to be less than 50% of the anticipated market value before Tier 1 investors invested capital and accrued return are at risk. 

EXIT PLAN – The borrower plans to sell the Properties on the open market upon completion. If a sale is not completed within the term the borrower may seek to refinance the CapitalRise debt with another lender.

VALUATION – Savills have provided an independent Red Book market valuation (January 2023) of the completed property of £6.4 million (£770psf). The breakeven point for Tier 1 investors’ is £385psf, for the loan overall it is £571psf,