ST. GEORGE'S HILL INVESTMENT OPPORTUNITY - 8% RETURN P.A.

Designer's impression of the planning approved property
funds raised

Investment Highlights

Annual interest rate 8% paid quarterly
LTV at exit  50%
Total amount being raised £1.5 million
Estimated term 16 months
Total expected return 10.7% (based on estimated term)
ISA Eligible 
Product Debt - Interest Bearing Bonds
Security First Legal Charge

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

 

Note on tax

This product is an interest bearing bond. If you do not choose to invest using the CapitalRise ISA then CapitalRise is required to retain tax at the UK basic rate - currently 20% - on all interest payments made, and pay it over to HMRC on the investor’s behalf. If the basic rate is not applicable, you may need to contact HMRC. A tax certificate will be issued to each investor annually after 5th April.

 

International Investor?

Interest on this investment will be paid to investors quarterly. CapitalRise is required to retain tax for all investors. If you are not a UK tax payer you will need to reclaim this tax payment from HMRC. You will be required to pay a £15 international payment charge for each quarterly interest payment made to you if paid to a non-UK bank account. If you would like to discuss please contact us.

Investment Summary

  • Property - The current 1.6 acre site is located on the prestigious private gated estate of St. George's Hill in Weybridge and consists of an existing unmodernised property. The developer has secured planning permission to develop a new 14,000 sqft residential property that will consist of 6 bedrooms, gym, indoor pool and clubhouse. The planning sought permission for the largest possible property for the site. The final design will be refined prior to construction.
  • Purpose – Your investment will be used to provide a bridging loan to the borrower until construction of the property commences or the site is sold with the planning permission.
  • Your Investment - You will receive an interest rate of 8% per year that will be paid quarterly. Invest using the CapitalRise ISA for tax-free returns. If you invest through a standard investment CapitalRise is obliged to retain tax at the UK basic tax rate - currently 20% - on all interest payments made to you. This amount will be paid to HMRC on your behalf. Tax rules apply and may change.
  • Structure – 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. There is also a Personal Guarantee provided by the borrower.
  • Sales Price – Savills has provided a Red Book Valuation of £3 million for the site with approved planning permission.
  • Exit Plan - There are a number of possible scenarios that can occur for your investment to be returned. The developer could commence construction of the property at which point they will refinance the existing debt. Alternatively, the developer could sell the site, with planning permission, to another developer. The final option is for the developer to refinance via another bridging loan.

The Plan

  • The developer purchased the 1.6 acre site which consists of an existing unmodernised property in May 2015.
  • Since purchasing the site the developer has secured planning permission to develop a new 14,000 sqft residential property that will consist of 6 bedrooms, gym, indoor pool and clubhouse.
  • The property is located in the prestigious private gated estate of St. George's Hill in Weybridge, Surrey. This area is renowned for it's large bespoke modern mansions that sit in the grounds close by to the private St. George's Hill golf club and lawn tennis club.
  • The borrower, and potential developer, specialises in developing luxurious homes. It is well respected and has a strong track record of achieving premium values.
  • Your investment will be used to provide a bridging loan to the borrower until construction of the property commences or the site is sold with the planning permission.
  • There are a number of possible scenarios through which the borrower is able to repay the loan. The developer could commence construction of the property at which point they will refinance the existing debt. Alternatively, the developer could sell the site, with planning permission, to another developer. The final option is for the developer to refinance via another bridging loan.
  • Your investment will be secured by a first legal charge on the property. There is also a personal guarantee provided by the developer up to 20% of the total loan amount.

Financials

FUNDING STRUCTURE - AT INVESTMENT

Developer Equity £ 3m 100%
Value Current Value
% of Value
CapitalRise Investors £ 1.5m 50%
The funding structure at the beginning and at exit are identical since interest will be paid quarterly by the borrower.

FUNDING STRUCTURE - AT EXIT

Developer Equity £ 3m 100%
Value Current Value
% of Value
CapitalRise Investors £ 1.5m 50%
The sale value of the property would have to be 50% less than the total market value for your invested capital or accrued returns to be at risk.

Investment Structure

  • A new subsidiary company of CapitalRise, CR Senior Limited, has been incorporated to issue bonds to investors. CR Senior Limited will use the proceeds of these bonds from investors to provide funds to the developer.
  • Your investment is ring-fenced because CR Senior Limited will not carry out any other commercial activity. The directors of this company will (through CapitalRise) administer and enforce the terms of the bonds issued by CR Senior Limited.
  • The investment is structured as interest bearing bonds. The bonds will be issued 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.
  • Interest will be paid to investors quarterly. 
  • If you invest through a CapitalRise standard investment then CapitalRise Finance Limited is required to retain tax at the UK basic rate - currently 20% - on all interest payments made, and pay it over to HMRC on the investor’s behalf. A tax certificate will be issued to each investor annually after 5th April. If you have not fully utilised your personal savings allowance or are a non-UK tax payer, you may be entitled to reclaim the tax paid. You are advised to contact HMRC directly regarding a refund or speak with a tax advisor about your circumstances.
  • If you invest though a CapitalRise Innovative Finance ISA then you will be paid total interest accrued per quarter. This interest will remain within your tax free wrapper as long as it is invested with CapitalRise, or transferred to another provider, in the same tax year.
  • CR Senior Limited is the beneficiary of a first legal charge. In any forced sale of the property, investors will recover their capital and accrued interest first, before the developer 
  • The Borrower has also provided a Personal Guarantee up to 20% of the value of the loan.

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 Senior 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 20% of the value of the total loan amount.
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.
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 site along with its planning permission. Your investment has an underlying redemption period of 27 months, including a 12 month 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 50% in order for your capital and accrued return to be at risk.

Deal Room

Documents

Deal Summary

Investor Bond Deed

Security Trust Deed

Access Deal Room
Only CapitalRise members can invest

Capital at risk. No FSCS protection. See Key Risks.