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Residential Rents Receivable
S E C U R E D L O A N N O T E
+ 4 4 ( 0 ) 1 2 1 2 3 7 4 6 1 0
W W W . P R O S P E R I T Y - W E A L T H . C O . U K
Contents Page
Key Features 3
Our Vision 4
Why Invest with Prosperity 5
Why Invest in the UK Property Market 6
Regional Trends in UK Residential Property Prices 7
UK Housing Shortage 8
Residential Rental Portfolio 9
UK Rental Prices 10
Annual Change in Residential Rents 11
Secured Loan Note Terms 12
Example of Prosperity Wealth 50/50 Purchase Plan 13
The Management Team 14
Important Notice and Risk Warning 15
Important NoticeThis document is a summary of the terms of the loan agreement and related security documents, and it should not be relied upon in isolation. You should
seek independent financial advice before investing. The company does not provide and is not authorised to give, financial advice and the information in this
summary should not be treated as advice. Advisers, and prospective investors not taking independent advice, should read and ensure they understand
the loan agreement and related security documents and should make their own further enquiries. Please contact the company if you need any additional
information or wish to review the working files.
• 8% interest income per annum paid 2% per quarter
• Term of 3 years
• Secured against a residential rental portfolio of 276 apartments valued at £23.6m
• Portfolio rent income of £1.49m per annum or £9.8m over the term of the 50/50 Purchase Plans
• Security over the assets of the company including assignment of the rental contracts
Important NoticeThis document is a summary of the terms of the loan agreement and related security documents, and it should not be relied upon in isolation. You should
seek independent financial advice before investing. The company does not provide and is not authorised to give, financial advice and the information in this
summary should not be treated as advice. Advisers, and prospective investors not taking independent advice, should read and ensure they understand
the loan agreement and related security documents and should make their own further enquiries. Please contact the company if you need any additional
information or wish to review the working files.
Key Features
4Important Notice: This document is a summary of the terms of the loan agreement and related security documents, and it should not be relied upon in isolation. You should seek independent financial advice before investing. The company does not provide and is not authorised to give, financial advice and the information in this summary should not be treated as advice. Advisers, and prospective investors not taking independent advice, should read and ensure they understand the loan agreement and related security documents and should make their own further enquiries. Please contact the company if you need any additional information or wish to review the working files.
To build and create desirable homes
and investment opportunities to a global
audience by delivering high grade residential
developments within prime
UK locations.
O U R V I S I O N
Important Notice: This document is a summary of the terms of the loan agreement and related security documents, and it should not be relied upon in isolation. You should seek independent financial advice before investing. The company does not provide and is not authorised to give, financial advice and the information in this summary should not be treated as advice. Advisers, and prospective investors not taking independent advice, should read and ensure they understand the loan agreement and related security documents and should make their own further enquiries. Please contact the company if you need any additional information or wish to review the working files.
F A C I L I T A T I O N B U S I N E S S E S W I T H I N T H E P R O S P E R I T Y G R O U P
Our in-house mortgage broker,
Verve, provides residential investment
mortgage solutions to our clients.
We also have a sales, letting and
management agency, Lamont Estates,
who offer our owners a full lettings
and management solution.
Why Invest with Prosperity
Founded in 2007, the Prosperity family of companies was born out of a passion to deliver affordable, buy-to-let
opportunities to a global audience. Energised by the sheer wealth of opportunity within the property sector,
Prosperity has already made its mark throughout the UK, with developments built and sold across key locations
and dedicated to offering investors an opportunity to invest in the UK’s number one asset class.
O F F I C E L O C A T I O N S
With the majority of the team based
at our Birmingham office HQ, we also
have offices in Dubai, Hong Kong and
Malaysia.
W H O W E A R E
A Birmingham based developer,
building and delivering desirable
apartments and offering an innovative
buy-to-let proposition to the private
investor.
O U R T E A M
Over 30 strong and all passionate
about property; working with the
very best industry professionals
and funders to deliver our projects.
O U R D E V E L O P M E N T S
Located throughout the UK where
rental demand and yields are high,
within areas of sustained high
employment, with a focus on
Birmingham and the Midlands.
P R O J E C T P O R T F O L I O
A residential and commercial
portfolio including 29 new build
and conversion projects.
5
D E M O G R A P H I C S
The UK is the third most populated state in the Europe, indicating a high demand for all types of commercial and
residential property.
O U T L O O K
41%Percentage of investors who feel positive about 2018 and
believe that their UK portfolio will continue to achieve growth.
R E N T A L D E M A N D
43 million
43 million households rent in the UK. Generation Rent undeniably represents a huge opportunity
and target market for developers and the buy-to-let investor.
6
https://www.landlordnews.co.uk/index-of-private-housing-rental-prices-for-great-britain-february-2018
Department for International Trade, UK Capital Investment Portfolio
Buy Association Investor Survey 2018
Why Invest in the UK Property Market
R E G E N E R A T I O N
£1bnRegional UK cities are flourishing.
Birmingham alone has undergone a transformation, with major
developments such as Paradise & Arena Central underway, and
a planned £1 billion regeneration scheme for the arrival of HS2.
R E N T A L P R I C E S
15.9%Increase in private rental prices
between January 2011 & June 2018
E C O N O M Y
Stability
Despite economic concerns following Brexit, the UK economy has demonstrated resilience in a number of markets. Additionally, property price increases have
remained positive.
N A T I O N A L G R O W T H
56%Property price rise over the next decade. Whilst London is still the
most expensive city, investors are now looking nationwide for the
best yields, house price growth, and entry points.
C O N N E C T I V I T Y
HS2The £56 billion project will bring
new business opportunities and continued growth to the cities
along its route. London along with Birmingham, Manchester, Liverpool and Leeds are envisaged to have a city centre HS2 station by 2033.
Important Notice: This document is a summary of the terms of the loan agreement and related security documents, and it should not be relied upon in isolation. You should seek independent financial advice before investing. The company does not provide and is not authorised to give, financial advice and the information in this summary should not be treated as advice. Advisers, and prospective investors not taking independent advice, should read and ensure they understand the loan agreement and related security documents and should make their own further enquiries. Please contact the company if you need any additional information or wish to review the working files.
7
Regional Trends in UK Residential Property Prices June 2018
Important Notice: This document is a summary of the terms of the loan agreement and related security documents, and it should not be relied upon in isolation. You should seek independent financial advice before investing. The company does not provide and is not authorised to give, financial advice and the information in this summary should not be treated as advice. Advisers, and prospective investors not taking independent advice, should read and ensure they understand the loan agreement and related security documents and should make their own further enquiries. Please contact the company if you need any additional information or wish to review the working files.
Scotland Average property price £156,578Monthly change 1.4%Annual change 2.8%
North East Average property price £149,098Monthly change -0.5%Annual change -0.1%
Yorks & Humber Average property price £192,861Monthly change 1.3%Annual change 4.0%
East MidlandsAverage property price £222,877Monthly change -0.2%Annual change 4.6%
North WestAverage property price £196,450Monthly change 1.1%Annual change 4.9%
West MidlandsAverage property price £226,264Monthly change 0.4%Annual change 5.5%
WalesAverage property price £194,028Monthly change 0.8%Annual change 5.0%
South WestAverage property price £312,201Monthly change 1.1%Annual change 3.7%
South EastAverage property price £412,073Monthly change 0.1%Annual change 1.2%
Greater LondonAverage property price £613,737Monthly change -0.9%Annual change -1.0%
East of EnglandAverage property price £360,071Monthly change 0.7%Annual change 2.4%
Increase from the previous month
Decrease from the previous month
8
Changing demographics mean the UK
must build a minimum of 250,000 new
homes per year to meet the rising demand.
H O U S I N G S H O R T A G E
Important Notice: This document is a summary of the terms of the loan agreement and related security documents, and it should not be relied upon in isolation. You should seek independent financial advice before investing. The company does not provide and is not authorised to give, financial advice and the information in this summary should not be treated as advice. Advisers, and prospective investors not taking independent advice, should read and ensure they understand the loan agreement and related security documents and should make their own further enquiries. Please contact the company if you need any additional information or wish to review the working files.
KPMG Shelter Report on UK Housing Demand 2015
Residential Rental Portfolio
9
Important Notice: This document is a summary of the terms of the loan agreement and related security documents, and it should not be relied upon in isolation. You should seek independent financial advice before investing. The company does not provide and is not authorised to give, financial advice and the information in this summary should not be treated as advice. Advisers, and prospective investors not taking independent advice, should read and ensure they understand the loan agreement and related security documents and should make their own further enquiries. Please contact the company if you need any additional information or wish to review the working files.
Southend on-Sea
DudleyPeterborough
KeighleyNottingham
Derby
Prosperity commands a wealth of experience in the UK residential property market, having successfully led
multiple property acquisition and regeneration ventures across the country. All of Prosperity’s developments
are designed and modern open plan layouts with medium to high standard interiors.
No. of Apartments
Valuation(£)
Rents Receivable(£)
Annual Rental Income (£)
% Portfolio
Bramble Court, Derby
The Parade, Worksop
Trent House, Newark
Varity House, Peterborough
Prosperity House, Derby
Priestgate House, Peterborough
The Pinnacle, Southend-on-Sea
Bentley Court, Keighley
Parkwood Court, Keighley
Castle Court, Dudley
4
4
1
13
24
4
2
92
88
44
361,000
390,000
100,000
1,550,000
3,320,000
740,000
325,000
6,430,000
6,180,000
4,265,708
160,185
116,241
38,995
522,923
1,001,180
158,335
112,788
2,909,439
2,819,839
1,988,147
21,900
18,300
5,040
95,718
168,540
33,900
21,600
426,900
411,000
289,200
1%
1%
0%
6%
11%
2%
1%
29%
28%
19%
Total 276 23,661,708 9,828,073 1,492,098
Interior specification
Breakdown of the Residential Portfolio
Worksop
10
All regions to the UK have experienced
annual increases in rents from 2010.
U K R E N T A L P R I C E S
Important Notice: This document is a summary of the terms of the loan agreement and related security documents, and it should not be relied upon in isolation. You should seek independent financial advice before investing. The company does not provide and is not authorised to give, financial advice and the information in this summary should not be treated as advice. Advisers, and prospective investors not taking independent advice, should read and ensure they understand the loan agreement and related security documents and should make their own further enquiries. Please contact the company if you need any additional information or wish to review the working files.
https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/indexofprivatehousingrentalprices/previousReleases
Annual Change in Residential Rents
Important Notice: This document is a summary of the terms of the loan agreement and related security documents, and it should not be relied upon in isolation. You should seek independent financial advice before investing. The company does not provide and is not authorised to give, financial advice and the information in this summary should not be treated as advice. Advisers, and prospective investors not taking independent advice, should read and ensure they understand the loan agreement and related security documents and should make their own further enquiries. Please contact the company if you need any additional information or wish to review the working files.
https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/indexofprivatehousingrentalprices/previousReleases
11
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Annualised change in average private rents
London England excluding London
Bramble Court, DerbyAverage annual rent £5,475Monthly rent £456
The Parade, WorksopAverage annual rent £4,575Monthly rent £381
Trent House, NewarkAverage annual rent £5,040Monthly rent £420
Varity House, PeterboroughAverage annual rent £7,363Monthly rent £614
Prosperity House, DerbyAverage annual rent £7,023Monthly rent £585
Priestgate House, PeterboroughAverage annual rent £8,475Monthly rent £706
The Pinnacle, SouthendAverage annual rent £10,800Monthly rent £900
Bentley Court, KeighleyAverage annual rent £4,640Monthly rent £387
Parkwood Court, KeighleyAverage annual rent £4,670Monthly rent £389
Castle Court, DudleyAverage annual rent £6,573Monthly rent £548
Rents of Residential Portfolio
IssuerResidential Rents Receivable Secured Funding Limited
Business Address Unit 1, JQ1, 32 George Street, Birmingham, B3 1QG
Amount being raised £3m
Return 8% per annum paid @ 2% per quarter
Term 36 months
50/50 Purchase Plan
A deferred payment plan whereby a property investor
pays up to 50% of the purchase price of a property.
The balancing payment is then paid to Prosperity Wealth
from the rental income. Prosperity Wealth has security over
the property and an assignment over the rental income.
No. of apartments in portfolio 276
Description of apartments Newly refurbished 1 & 2 bed apartments
Total value of residential portfolio £23.6m
Annual gross rental income £1.49m
Total rents to be collected over term of 50/50 Purchase Plan
£9.8m to be collected from the future receivables and paid
to Prosperity Wealth under the 50/50 Purchase Plan.
Security
A charge over the assets of the company including
an assignment of the rental contracts including total
receivables of £9.8m from a portfolio of 276 residential
apartments with an annual receivable of £1.49m.
Collateral account or reserve bank account to facilitate the repayment of the loan notes
The annual receivables after the management charges
and interest payments are to be held in a collateral
account, or reserve accounts for the repayment of the
loan notes with £1m per annum being transferred to the
bank account to repay the loan notes of £3m.
Interest coverage ratiosThe annual interest charge of £240,000 is covered 6.25
times by the annual receivables of £1.49m.
SUMMARY TERMS
Secured Loan Note Terms
12
Important Notice: This document is a summary of the terms of the loan agreement and related security documents, and it should not be relied upon in isolation. You should seek independent financial advice before investing. The company does not provide and is not authorised to give, financial advice and the information in this summary should not be treated as advice. Advisers, and prospective investors not taking independent advice, should read and ensure they understand the loan agreement and related security documents and should make their own further enquiries. Please contact the company if you need any additional information or wish to review the working files.
Example of Prosperity Wealth
50/50 Purchase Plan
13
Important Notice: This document is a summary of the terms of the loan agreement and related security documents, and it should not be relied upon in isolation. You should seek independent financial advice before investing. The company does not provide and is not authorised to give, financial advice and the information in this summary should not be treated as advice. Advisers, and prospective investors not taking independent advice, should read and ensure they understand the loan agreement and related security documents and should make their own further enquiries. Please contact the company if you need any additional information or wish to review the working files.
Summary of 1 bed apartment £ GBP
Purchase Price £63,000
Legal Fees £850
Total Amount Due £63,850
Reservation & Exchange Stage
Prosperity Reservation Deposit 3% £3,000
Legal Fees £850
Reservation / Exchange stage total due £3,850
Monthly Deposit Payment of 50% £30,000
Deposit divided by 24 month build schedule £7,500
Rental Payment of 50%
Balance of purchase price payable from rental income £30,000
Year 1 rental repayment £4,800
Year 2 rental repayment £4,800
Year 3 rental repayment £4,800
Year 4 rental repayment £4,800
Year 5 rental repayment £4,800
Year 6 rental repayment £4,800
Year 7 rental repayment £1,200
Bentley Court, Keighley
Property investor pays 50% of the purchase price in installments.
The balancing 50% is paid to Prosperity Wealth from the rental income.
Prosperity Wealth have security over the property and an assignment over the rental income.
Interior shots
M A R T I N G R I F F I NC O M M E R C I A L D I R EC TO R
A property finance professional with extensive funding
experience at organisations such as Merrill Lynch and
Barclays Bank, Martin has property development and
delivery experience as a finance and project director.
He is a Fellow of the Institute of Chartered Accountants,
member of the Association of Corporate Treasurers
and the Project Management Institute.
J O E B I L L I N G H A MFO U N D E R & C H A I R M A N
Founder and chairman of the Prosperity Family of
Companies, Joe’s passion for property as the No. 1
asset class has been widely documented. With 25
years of living and breathing the property industry. As
Chief Executive Officer, Joe continues to drive forward
the business plan.
The Management Team
14
ST U A R T M I L L A R DF I N A N C I A L C O N T R O L L E R
Stuart is a Member of the Association of Accounting
Technicians and is responsible for the financial control
and day to day administration of the company.
Important Notice: This document is a summary of the terms of the loan agreement and related security documents, and it should not be relied upon in isolation. You should seek independent financial advice before investing. The company does not provide and is not authorised to give, financial advice and the information in this summary should not be treated as advice. Advisers, and prospective investors not taking independent advice, should read and ensure they understand the loan agreement and related security documents and should make their own further enquiries. Please contact the company if you need any additional information or wish to review the working files.
Important Notice and Risk Warning
This document is a summary of the terms of the loan note, and it should not be relied upon in isolation. You
should seek independent financial advice before investing and read this document in conjunction with the
legal documents. The company does not provide and is not authorised to give, financial advice and the
information in this summary should not be treated as advice.
Advisers and prospective investors should read and ensure they understand the loan note and related
security documents and should make their own further enquiries if required. Please contact the company
if you need any additional information or wish to review the working files. While this loan investment offers
an annual return of 8%, it is important to remember that the investment it is not suitable for everyone and is
to paid from the net rental income on a portfolio of residential property.
Potential investors are strongly recommended to consult an independent adviser who specialises in
investments of this nature before making any decision to invest. The interest will be paid gross, and the
investor will be responsible for their own taxation affairs and compliance. The following risk factors are
considered the key risk factors:
• The interest payment and the return of capital are reliant on the collection of rental income from a
portfolio of residential property.
• The loan investment should be viewed as a medium-term investment. You should not invest if you are
likely to require the capital back in the short term.
• The company’s business plans are based on its understanding of current law, regulation, taxation and practice in the United Kingdom. Adverse changes in these may impact the business plan.
• The company retains property professional, a panel of experienced professional and external advisers to assist in assessing and managing these risks and is dependent on retaining the skills of these
professional.
• This investment is not covered by the Financial Services Compensation Scheme.
• The investor is responsible for their own taxation affairs and compliance.
I N F O @ P R O S P E R I T Y - W E A L T H . C O . U K
UK
+44 (0) 121 237 4610
JQ1, 32 George St, Birmingham B3 1QG
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