CLARKS ROW, OXFORD PHASE B - 8.75% RETURN P.A.

DESIGNER'S IMPRESSION OF THE PROPERTY (RIGHT)
funds raised

Investment Highlights

Product Debt - Deep Discounted Bonds
Forecast annual return 8.75% p.a. paid at the end of the term
Total amount being raised £1.47 million
Amount being raised in this phase £0.13 million
LTV at exit 65.5%
Estimated end date April to June 2021 (16-18 months)
IFISA Eligible 
Legal charge First Legal Charge and Personal Guarantee provided by the developer

 

Date of funding

The borrower will receive the funds for this phase on Friday 13th December. If you invest before this date your funds will be processed on that day. This is when your investment will start accruing returns.

Investment Summary

  • OVERVIEW – This investment opportunity gives CapitalRise members access to fund the second phase of a loan for the development of three new townhouses in central Oxford.
  • PROPERTY – The townhouses will all benefit from three bedrooms and two bathrooms, laid out over three or four floors. The development is on the site of an existing 17th-century property and will retain the original outer wall, to remain in keeping with the traditional local architecture and aesthetics. 
  • PLAN – The developer is using this first phase of funding to acquire the site, complete with planning permission for the proposed scheme. The total expected investment term is 16-18 months, covering 10 months of development and a 6-8 months sales period.
  • LOCATION – The site is located just a stone's throw from Oxford University's Christ Church College and a short walk from the river Thames. It is also within a mile of the mainline railway, with direct transport links to central London.
  • YOUR INVESTMENT – Investors will benefit from a first legal charge over the property, therefore, in the event of a forced sale of the property, CapitalRise investors would recover their investment first. If the developer is unable to repay the loan CapitalRise will seek to force the sale of the property on behalf of investors. If a sale is achieved the value would need to be less than 65.5% of the anticipated market value before your invested capital and accrued return are at risk.
  • SALES PRICE – Strutt & Parker have provided an independent Red Book Valuation of £2.6 million upon completion of the development.
  • EXIT PLAN – Construction of the property is scheduled to complete part way through the term providing a suitable period for the borrower to refinance their debt. 

PROJECT PROGRESS

Before each loan drawdown a Project Monitor, that is appointed by CapitalRise, visits the site. They verify exactly what works have been completed in the period and their associated costs. Only after receiving their report, is the borrower allowed to drawdown funds to cover the costs incurred during that period.

From the outset of this project the development was due to commence w/c 11th November. Up until this point the developer has been seeking the discharge of a number of pre-commencement conditions as per the original planning permission granted by the local authority. The project monitor has seen evidence that these have been submitted and works have commenced this week. Therefore the costs in this phase primarily consist of professional fees and set up costs. The independent Project Monitor has confirmed that they beleive the project to be on schedule.

Returns Calculator

Return- Forecast return of 8.75% p.a. paid at the end of the term

Investment amount

Return accrues

You Invest

Dec 2019
Aug 2020
Apr 2021

Total Return

On original Investment of

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 is using the funds to acquire a site in the centre of Oxford to develop three townhouses.
  • The development is located next to Christ Church Cathedral, in close proximity to central Oxford's shops, restaurants and attractions. 
  • As with all CapitalRise investments the borrower has already been provided with this phase of the loan before all investor funds are received through our pre-funding mechanism. This ensures the borrower was able to receive funds when required.
  • The three new townhouses will all be three-bedroom homes, complemented by spacious kitchens and living rooms, laid out over three or four floors. An original 17th Century external wall will be retained to remain in keeping with the local architecture. 
  • The refurbishment is expected to complete within the first 11 months of the investment leaving a suitable 6 to 8 month sales period.
  • The developer will be provided with £0.08 million in this phase. They will be provided with up to a further £0.64 million over the next year to complete the development works.
  • All construction phases cover costs already incurred and are independently verified by a project monitor appointed by CapitalRise.
  • Strutt & Parker have provided an independent ‘red book’ valuation of £2.6 million for the completed property.
  • The developer has a wealth of experience in construction, as a Chartered Quantitiy Surveyor and qualified Barrister specialising in construction law. As this is one of the first development projects they will be undertaking themselves, the developer has enlisted a Non-Executive Director who has 25 years experience developing property. Most recently, this individual held a Managing Director role at a large property group who have an incredibly strong track record, having delivered over 1,200 units in London and the South East.

Location

  • The property is located over the road from Oxford's Christ Church Cathedral and the surrounding public park.
  • Other top attractions such as the Bodleian Library, Oxford Castle and the University Parks are all within walking distance.
  • The city's main shopping area and entertainment are just a couple of streets away.
Nearest stations
Station icon

Oxford (0.8 mi)

Financials

Funding Structure - at the beginning of the loan (phase A)

Developer Equity £ 0.95m 100%
Value Original Value
% of Value
CapitalRise Bondholders £ 0.73m 73%
When investing you're providing a loan to a developer. In return you are issued bonds by a dedicated subsidiary property company (CR Clarks Row Ltd). The company is the beneficiary of a First Legal Charge over the property.

Funding Structure - at exit (18 months)

Developer Equity £ 2.6m 100%
Value Anticipated Value
% of Value
CapitalRise Bondholders £ 1.7m 65.5%
If the developer is unable to repay the loan CapitalRise will seek to force the sale of the property on behalf of investors. If a sale is achieved the value would need to be less than 65.5% of the anticipated market value before your invested capital and accrued return are at risk.

Investment Structure

  • A new subsidiary company of CapitalRise, CR Clarks Row Limited, has been incorporated to issue bonds to investors. CR Clarks Row 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 CapitalRise investors’ funds will be used to refinance the pre-funders.
  • Your investment is ring-fenced from other CapitalRise investments because CR Clarks Row 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 Clarks Row 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.
  • CR Clarks Row 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 developer has also provided a Personal Guarantee up to 25% of the total amount of the loan.
  • CR Clarks Row 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 IFISA. Investors should take their own tax advice from an appropriately qualified professional.
  • To meet investor demand CapitalRise may allow investments totalling a sum greater than the present amount being raised in this phase. The oversubscribed amount will be deducted from future phases. Any potential oversubscription amount is accounted for in the stated loan to value ratios quoted.

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 – The developer may not be able to repay the loan meaning your capital is at risk and the income is not guaranteed. CR Clarks Row Limited has the benefit of a first legal charge against the property. In the event that the developer cannot repay your capital and accrued return, CapitalRise may be able to force the sale of the property on behalf of the investors. However, the outcome is uncertain and there is a risk that you may not recover the full amount due. The developer has also provided a Personal Guarantee up to 25% of the total value of the loan.
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 is knowledgeable of construction having worked in the industry for 25 years as a chartered surveyor and qualified barrister specialising in construction law and is now moving into undertaking construction projects themselves. A Non-Executive Director on the scheme is an individual with over 25 years in property development. The contractor has a proven track record for the development of high specification homes and apartments in the local area and further afield. CapitalRise has also undertaken its usual highly detailed due diligence on the developer's architect and structural engineer and are confident in the overall team’s ability to deliver this project. Should there be a delay past the end of the estimated term range your investment will continue to accrue returns up until a hard stop date in April 2022.

Sales Rate Risk – Sales rates may be slower than forecast and/or the properties may sell for less.

Your investment has an underlying redemption period of 32 months from August 2019, which includes a 10 month buffer in the event a potential sales takes longer than anticipated.

Compensation Scheme – The Financial Services Compensation Scheme does not cover poor investment performance.

You cannot claim FSCS compensation if your investment does not perform as expected.

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. If a sale is achieved the value would need to be less than 65.5% of the anticipated market value before your invested capital and accrued returns are at risk.

Deal Room

Documents

Investor Bond Deed

Security Trust Deed

Access Deal Room

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