BEACONSFIELD PHASE A - 8.5% RETURN P.A.

Designer's impression of previous developments undertaken by the developer
funds raised

Investment Highlights

Forecast annual return 8.5% p.a. paid at the end of the term
Forecast total return 15.4%
Total amount being raised £2.1 million
Amount being raised in this phase £0.98 million
LTV at exit 66%
Estimated term 21 months
ISA Eligible 
Product Debt - Deep Discounted Bonds
Legal charge First Legal Charge

 

The forecast total return is based on the estimated term and is not guaranteed.

 

Change to amount raised in this phase

Since the announcement of this investment opportunity the total amount of the loan has been reduced by approximately £100,000. This has been updated in the loan metrics above.

Investment Summary

  • OVERVIEW – This investment provides investors access to the first phase of development finance being used to create a new high specification home in the Buckinghamshire countryside.
  • PROPERTY – A new family dwelling located in the quaint market town of Beaconsfield which lies less than 25 miles west of central London.
  • DEVELOPER – The borrower has extensive experience with similar properties. Their impressive portfolio of sold properties boasts a number of grand family homes, like this property, as well as over 50 central London luxury residences. The past performance of previous projects is not however indicative of future results for this project.
  • PLAN – The borrower purchased the site towards the end of 2017 and has subsequently secured planning permission to construct a new high specification family home consisting of 5 ensuite bedrooms, 3 reception rooms and a large open plan kitchen and breakfast room. 
  • EXIT PLAN – Construction of the property is scheduled to complete part way through the term providing a suitable sales period towards the end. Should a buyer not be found the borrower may refinance onto a Sales Period Loan.
  • YOUR INVESTMENT – Investors will benefit from a first legal charge on the property. In the event of a forced sale of the property, CapitalRise investors would recover their investment first. The value of the property would have to be 34% less than the anticipated sale value before investors' capital and return would be at risk. The borrower has also provided a Personal Guarantee up to £400,000 during the construction phase of the project with it then reducing to £250,000 during the sales period.
  • SALES PRICE – Savills have provided an independent Red Book Valuation of £3.85m upon completion of the development.

Returns Calculator

Return- Forecast return of 8.5% p.a. paid at the end of the term

Investment amount

Return accrues

You Invest

Mar 2019
Aug 2019
Dec 2020

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

  • Since purchasing the site in late 2017 the borrower has subsequently secured planning permission for the development of a new detached family home.
  • The 6,200 sqft private gated house will consist of 5 bedrooms that all benefit from ensuite bathrooms and 3 will incorporate walk-in wardrobes. There are 3 reception rooms, an open plan kitchen as well as a detached double garage.
  • The borrower has a strong track record for the development of high specification homes and apartments.
  • The borrower is using part of the loan to refinance an existing facility as well as to cover the costs required to undertake the construction.
  • The borrower is being provided £0.98 million at the beginning of the loan term. A further £1.17 million will be provided throughout 2019. These later phases will be launched on the CapitalRise platform and will be available for CapitalRise members to invest.
  • The borrower is a highly experienced developer who has excellent knowledge of the area. They have completed a number of similar developments nearby and also have experience developing and selling central London luxury residences.
  • Construction of the property is scheduled to complete part way through the term of the investment providing a suitable sales period towards the end of the term. The borrower plans to sell the property on the open market. Should the borrower be unable to sell the property within this period they will have the option to refinance onto a sales period loan.
  • Investors will benefit from a first legal charge on the property. In the event of a forced sale of the property, CapitalRise investors would recover their investment first. The borrower has also provided a Personal Guarantee up to £400,000 during the construction phase of the project with it then reducing to £250,000 during the sales period.

Financials

FUNDING STRUCTURE- AT INVESTMENT

Developer Equity £ 1.8m 100%
Value Current Value
% of Value
CapitalRise Investors £ 0.98m 54%
The investment provides the first of a number of phases of development finance.

FUNDING STRUCTURE-AT EXIT

Developer Equity £ 3.85m 100%
Value Current Value
% of Value
CapitalRise Investors £ 2.55m 66%
The property's sale value would have to be more than 34% lower than the anticipated market value for your invested capital and accrued return to be at risk.

Investment Structure

  • A new subsidiary company of CapitalRise, CR Beaconsfield Limited, has been incorporated to issue bonds to investors. CR Beaconsfield Limited has already sourced some finance from pre-funding investors in order to facilitate the property transaction. We, CapitalRise Finance Limited, are one of the pre-funders and one of the other pre-funders is associated with us. The CR investors’ funds will be used to refinance the pre-funders.
  • Your investment is ring-fenced because CR Beaconsfield Limited 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 CR Beaconsfield Limited.
  • The investment is structured as deep discounted bonds. Deep-discounted bonds (also zero coupon bond where no interest is paid or discount bond) are bonds bought at a price lower than its face value, with the face value repaid at the time of maturity. For more information see the FAQ section. 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 8.5% per annum, compounded annually.
  • CR Beaconsfield Limited is the beneficiary of a first legal charge. In any forced sale of the property, investors will recover their capital and accrued return, before the developer.
  • The borrower has also provided a Personal Guarantee up to £400,000 during the construction phase of the project with it then reducing to £250,000 during the sales period.
  • CR Beaconsfield Limited 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 unless you invest via your CapitalRise ISA. 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 How this applies to you
Capital and Income Risk – Your capital is at risk and the income is not guaranteed. CR Beaconsfield Limited has the benefit of a first 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 borrower has also provided a Personal Guarantee up to £400,000 during the construction phase of the project with it then reducing to £250,000 during the sales period.
Investment Liquidity Risk – You need to be prepared to hold this investment for the full term. We do operate the CapitalRise Bulletin Board where you can post your investment for sale at its current value. This does not guarantee a sale. CapitalRise will charge a fee of 1.5% of the sale amount if a buyer is found. You can post your investment for sale from within your CapitalRise account.
Construction Risk- As with any developments project, there might be a delay in the construction phase The developer has a proven track record for the development of high specification homes and apartments. Most notably they have completed a number of homes similar to this project. Should there be a delay past the estimated term your investment will continue to accrue returns for a further 12 months up until a hard stop date.
Sales Rates Risk – Sales rates may be slower than forecast and/or the properties may sell for less. One potential exit for your investment is a sale of the property after construction. Your investment has an underlying redemption period of 33 months, which includes a 12 months buffer in the event a potential sale takes longer than anticipated.
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.

Market Risk - If the market for residential property in the local area 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 34% or more in order for your capital and accrued return to be at risk.

Deal Room

Documents

Investor Bond Deed

Security Trust Deed

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Only CapitalRise members can invest

Capital at risk. No FSCS protection. See key risks.