OPEN FOR INVESTMENT

RADLETT PHASE A - 8% RETURN P.A.

Designer's impression of the property and interior
of a previous project by the developer
Only CapitalRise members can invest

Investment Highlights

Forecast annual return 8% p.a. paid at the end of the term
Forecast total return 16.7%
Total facility amount £8.07 million
Amount being raised in phase A £1.87 million
LTV at exit 66.7%
Estimated end date May 2021
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.

 

Information contained here is indicative only and is subject to change pending the completion of due diligence on the project. Investors will be provided with final deal information prior to investing which will highlight any changes.  

Investment Summary

  • Overview – This investment provides investors access to the first phase of finance for the development of a new high specification apartment building in the Hertfordshire town of Radlett.
  • Properties – Investors will be providing finance to a developer who is acquiring a large detached house within c. 0.6 acres. The developer will demolish the existing dwelling and replace it with 10 purpose built luxury apartments in accordance with the full planning permission that has been obtained.
  • Developer – This highly experienced award-winning developer has an impressive track record having completed 17 projects. They specialise in Radlett and the surrounding the area developing high specification family homes and apartments.
  • Plan – The borrower will be using the proceeds from this phase to fund the acquisition of the site. Subsequent phases will fund construction activities. The planning is approved property for a neo-Georgian four-storey apartment building with a large basement containing car parking for two vehicles per apartment. All residents will benefit from a fully landscaped garden as well as a lift servicing all floors.
  • Security – Investors will benefit from a first legal charge over 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 33.3% less than the anticipated gross development value for investor capital and accrued returns to be at risk. The borrower has also provided a personal guarantee up to 20% of the total loan value. 
  • Sales price – Strutt & Parker have provided an independent Red Book Valuation of £12.1 million upon completion of the development.
  • Exit plan –  Local agents have indicated there is high demand for housing of this nature, particularly amongst individuals and couples looking to downsize. A six months sales period is included within the term of the loan upon completion of the development. Should the borrower not achieve a sufficient number of sales within the term of the loan to repay CapitalRise investors they will have the option to refinance their loan. CapitalRise has already had indications from another borrower that they would finance a Sales Period Loan but of course this is not guaranteed.

Returns Calculator

Return- Forecast return of 8% p.a. paid at the end of the term

Investment amount

Return accrues

You Invest

May 2019
May 2020
May 2021

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

  • The borrower will be using the funds from this loan to acquire the site and develop 10 high specification apartments in the affluent Hertfordshire town of Radlett. 
  • This first phase of funding will be used to complete on the purchase of the site. As with all CapitalRise investments the borrower has been provided the loan before all investor funds are received through our pre-funding mechanism. This ensures the borrower was able to complete on the purchase which took place on 30th April 2019. 
  • The site currently consists of one dated 1920’s property which the borrower will be demolishing.
  • The planning approved development consists of 10 apartments spread over 14,000 sq ft on 4 floors.
  • All apartments have 2 bedrooms with 3 bathrooms and range from 1,300 sq ft to 1,600 sq ft. Each apartment will have two allocated parking spaces.
  • Construction is expected to take place over a period of 18 months. This provides a 6 month sales period towards the end of the loan. 
  • The borrower will be provided with an additional £5.2 million to cover the construction. This will be provided in phases and will be available on the CapitalRise platform over the next 18 months. 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 £12.1 million for the completed scheme with each of the 10 apartments ranging in valuation from £1.08 million to £1.36 million. 
  • The borrower is a highly experienced award-winning developer who has an impressive track record for the development of pre-planned and bespoke homes since starting out in 2002. They have completed schemes consisting of over 130 units and have over 200 units in development including this project.

INVESTMENT WEBINAR

Past performance is not a reliable indicator of future performance.

Location

  • Radlett is an affluent settlement located just 14 miles north west of central London.
  • The area is extremely popular for London professionals seeking green space and fantastic schools.
  • The property is within walking distance of the local high street.
  • The area is particularly popular with local couples looking to downsize but remain close to central London.
  • Aldenham Country park is also located nearby providing 100 acres of beautiful countryside within the M25.
Nearest stations
Image result for national rail

Radlett (0.3 mi)

Financials

FUNDING STRUCTURE - AT PHASE A

Borrower Equity £ 2.86m 100%
Value
% of Value
CapitalRise Investors £ 1.87m 65.5%
The investment provides the first of number of phases of development finance.

The site was purchased by the borrower for £2.86m.

FUNDING STRUCTURE - AT EXIT

Developer Equity £ 12.1m 100%
Value
% of Value
CapitalRise Investors £ 8.07m 66.7%
The property's sales value would have to be more than 33.3% lower than the anticipated market value for your invested capital and accrued returns to be at risk.

Investment Structure

  • A new subsidiary company of CapitalRise, CR Watford Road Limited, has been incorporated to issue bonds to investors. CR Watford Road 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 Watford Road 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 Watford Road Limited.
  • The investment is structured as deep discounted bonds. A deep-discounted bond (also zero coupon bond where no interest is paid or discount bond) is a bond 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% per annum, compounded annually.
  • CR Watford Road 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 provided a Personal Guarantee up to the value of 20% of the total loan amount.
  • CR Watford Road 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.

The Developer

Heronslea Group

  • Heronslea are an award-winning developer founded over 17 years ago.
  • They specialise in prestigious luxury developments in North London and the Home Counties.
  • The founders have a huge amount of experience and are involved with all of their projects.
  • Their completed portfolio consists of over 130 units.



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More information

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 Watford Road 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 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.
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 36 months, which includes 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 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. The property value would need to fall by 33.3% or more in order for your capital and accrued return to be at risk.

Deal Room

Documents

Investor Bond Deed

Security Trust Deed

Access Deal Room

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