Limerston Street, Chelsea - Development Loan

Investment Summary

OVERVIEW – In March 2022 CapitalRise provided a bridging loan to fund the acquisition of this freehold property, this loan has now been successfully redeemed and CapitalRise is providing a new loan to refinance the existing debt and fund the subsequent development of a three-storey family-sized house on Limerston Street (referred to as "the Property”), which is located in the Prime Central London neighbourhood of Chelsea. Investors in the bridging loan have been redeemed and subject to availability can choose whether they want to reinvest in this development loan. CapitalRise investors in this loan will be part-funding the facility alongside an Institutional Funding Partner.  

TERM – The estimated term for this investment is 20-26 months. If the loan is not repaid by the end of the estimated term, returns will accrue on investments for a further 6 months until the hard stop date (November 2025). 

PLAN – The Borrower will use this phase of funding to refinance the existing debt on the Property. The facility will also provide finance for the development of the scheme. CapitalRise investors will fund the refinancing section of the loan alongside the Institutional Funding Partner. The Institutional Funding Partner will then fund all of the subsequent construction costs for the development. Full planning permission has been granted, the proposed scheme is to demolish the current building and subsequently construct a three-storey (plus basement) family-sized house completed to a high specification finish, in line with the Borrower’s previous schemes. 

LOCATION – The Property is located in Chelsea, a highly sought-after prime southwest London location within the boundaries of the Royal Borough of  Kensington & Chelsea. The Property is located on Limerston Street a well-regarded residential address connecting Fulham Road and the King’s Road, the two key high streets serving Chelsea. There are numerous amenities in Chelsea within convenient access and good public transport links.

PROPERTY – The Property occupies an end-of-terrace position with an appealing triple aspect towards the east, south and west. The existing Property is a derelict three-bedroom dwellings, built in the c. 1950s. The Borrower intends to demolish the existing property and subsequently construct a large family dwelling over three-storeys (plus basement). The Property will have three bedrooms and a large private garden, with a parking permit on the street for 2 cars. Total GIA is expected to be 2271 sq.ft. 

THE BORROWER – The Borrower is Wilben Developments. They specialise in the acquisition and redevelopment of residential property in Prime Central London. The principals have a combined 30 years' experience in London’s prime central property market. In 2009, they established Wilben with a simple philosophy: to create enviable homes within London’s most sought-after addresses. Achieved through earned expertise in every facet of the property business, from site acquisition to interior design, they are responsible for developing over £200 million of property to date. CapitalRise has worked with this Borrower on two previous development projects, both of which performed very well and were repaid in advance of the maturity date and, in our experience, the quality of their product is excellent.

YOUR INVESTMENT - CapitalRise investors are lending alongside a CapitalRise Institutional Funding Partner who will be repaid first in exchange for a lower rate of return to reflect their lower risk position. The loan CapitalRise is providing to the Borrower benefits from a comprehensive security package which includes the following, a shared First Legal Charge over the Property and a First Ranking Debenture over the Borrower, a charge over the shares of the Borrower, a Personal Guarantee limited to 25% of the Gross Loan, warranties from the Architect, Structural Enigneer and M&E Enigneer. CapitalRise is the security trustee for both CapitalRise Investors and the Institutional Funding Partner. CapitalRise will always act in the best interests of both CapitalRise investors and the Institutional Funding Partner, and will always seek to recover both invested capital and accrued interest in full. If the Borrower was unable to repay the loan, CapitalRise could force the sale of the Property, and in this situation, CapitalRise investors will be paid after the Institutional Funding Partner but before the Borrower. To return all invested capital and accrued returns back to CapitalRise investors, CapitalRise would have to recover 70% of the GDV (Gross Development Value) of the Property.

EXIT PLAN – In terms of exit, the Borrower intends to sell the Property on the open-market in order to repay the CapitalRise gross debt.