Your capital is at risk and investments are not covered by the Financial Services Compensation Scheme (FSCS).

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Your capital is at risk and investments are not covered by the Financial Services Compensation Scheme (FSCS).

Edward Street - Interim Equity

Edward St, Birmingham


£623,600

Funded

£1,053,700

Total Fund


Term (Months)
12

Projected Annualised Return
15.0%

Strategy
Development

Interim Equity
Projected returns are an estimate. Returns may go down or up based on the future market value of the property and rental values achieved.


Key Points


  • Rare opportunity to invest in a new build development
    This is a rare opportunity to invest in a new build development that is already underway in central Birmingham. Equity is being raised to replace mezzanine finance used to acquire the site along with the preparations for construction.
  • 63 apartments together with commercial space on the ground floor
    This prime five and six story development will deliver 63 apartments together with commercial space on the ground floor and 18 car parking spaces. There is also a shared, secluded courtyard space at first floor level. Works started on site on 15th November 2016 and is due to be completed during March 2018. All units have been pre-sold by Prosperity to their investment buyers and is being delivered under a fixed price JCT contract.
  • Fixed return of 15% p.a.
    Prosperity are raising equity to add to their existing £500,000 of capital and are offering a fixed return of 15% p.a. using our Interim Equity arrangement. Holders of Redeemable Shares will receive the equivalent of 12.6% of projected net profits after tax. This will be paid as a capital gain when the shares are redeemed at a price of £1.15 per share, on or before the 31st March 2018.
Summary
  • Prime B1 postcode location
  • Full planning approved and ground works underway
  • 63x 1 and 2 bed luxury apartments, 18 car park spaces and 2 commercial units
  • All units pre-sold by Prosperity to investment buyers
  • Shares will be redeemed at a pre-agreed price of £1.15 at the end of the 12 month term

PLEASE NOTE: This is a leveraged investment that uses debt secured via a first charge on the development. As such there is a risk that in the event that the debt is not repaid, that some of your capital is not repaid.

Projected returns


Ordinary Class B Shares
  • For investors investing £20,000 or more
  • Projected Total Return of 44% or 22% p.a.**
  • Over 24 months
  • Minimum Preferred Return of 16% p.a.***
Ordinary Class C Shares
  • For investors investing £20,000 or less
  • Projected Total Return of 35% or 17.5% p.a.**
  • Over 24 months
  • Minimum Preferred Return of 12% p.a.***

*Target start date is 31st May 2018. Shares may be issued in two tranches to avoid delays.
** Projected return to be paid as a capital gain if circumstances make it possible to do so
*** The Minimum Preferred Return is the return payable to Crowd Investors before the Developer takes any profit themselves.

Property name: Edward Street

Address: Birmingham

Property type: Flat - Purpose built

Property age: 2000+

Market type: Young professionals

Description: Prosperity are delighted to offer CrowdLords Investors the opportunity to invest in a new build development that is already underway, right in the centre of Birmingham.  Read more.

Local Property Market


Birmingham is often under the shadow of London and Manchester but it remains the UK’s second city. It is the home of Cadbury’s, Jaguar Landrover and a clutch of blue chip accountancy firms including Grant Thornton and pwc.

The residential property market in Birmingham remained static for a while following the slowdown in 2008, but in 2013 things changed and demand outstripped supply for investment property.

The city has much to be proud of and is one of the most thriving cities in the UK. It attracts millions of people each year as a place to study, work, live or visit.

Edward Street is minutes away from Birmingham New Street, the busiest rail interchange outside of London and now connected to the broader city area via the tram. The international airport, served by major airlines, provides direct flights to New York, Amsterdam, Paris among other popular destinations.

Birmingham has three universities and is considered a prime location to study with the UK’s second largest student population outside of London. More and more overseas students and young working professional are choosing to settle here attracted by a vibrant lifestyle, affordability and exceptional transport links.

Local Property Market analysis uses House Price Index data from The Land Registry. The commentary is opinion only and should not be taken as fact.

 

Capital Investment


Purchase Price £1,161,000
Stamp Duty £46,400
Legal & Professional Fees £225,000
Development Costs £6,026,848
Contingency Allowance £159,679
CrowdLords Fees £53,700
Total Investment £7,672,667
Less Development Finance -£6,618,967
Remaining Funds Required * £1,053,700

* Shares may be issued in Tranches to avoid delays

 

Capital Returns


Gross Development Value* £9,359,300
Market Growth** £0
Gross Sales Price £9,359,300
Gross Development Profit £1,686,633
Sales & Finance Costs -£818,439
CL Growth Fees -£44,315
Gross Profit £823,879
Corporation Tax -£164,776
Projected Net Profit -£659,103
Projected Total Capital Return 62.6%
Share of Equity held by Crowd Investors 52.55%
Share of Growth Paid to Crowd Investors*** 24.0%
Capital Return to Investors £82,590
Projected Capital Return to Investors 15.0%

*The stated Gross Development Value is based on the current sales values according to local agents/p>

**Market Growth has not been considered as is normal practice

*** Holders of Redeemable Shares are eligible to 15.0% of capital growth p.a.

 

Return Summary


Investment Period 12 Months
Projected Total Return 15.0%
Projected Total Annualised Return 15.0%

CrowdLords Development Analysis


Risk Return Profile*

CrowdLords Risk Rating
Market Sensitivity A
Time Sensitivity A
Cost Sensitivity A
Level of Preferred Return A
Developer's Track Record A
Overall A

* The Risk Return Profile is a subjective assessment made by CrowdLords based on the information provided by the LandLord. Investors should make their own assessment of Risk & Reward before investing

 

Capital Returns

We include a CrowdLords Risk Rating to illustrate where the investment lies on our Risk Return Profile.  Where risks are higher it is usual to expect a higher return and this is designed to aid quick comparisons only. It is our opinion only and should not be taken as a recommendation. You should judge the Risk for yourself using the information provided and your own investigations to form your own opinion.
We rate Risk across 5 parameters and grade them as being A, B, C, D or E. A being lower Risk. The five areas we grade are:

The Investment Period – the longer the period, the less the risk
Macro location and market – has the area performed well historically
Micro location – is the property in a good location for rental / sale
Level of Development – the degree of development and the cost / time risks
Track Record – the track record of the LandLord / Developer

We combine these into a weighted rating between A and E and show how the Risk / Return compares with what we would expect.

About the Sponsors


Prosperity Group is a Birmingham based property development company that specialises in delivering UK investment properties for property investors around the world.

Whilst they have a Midlands focus their developments are located throughout the UK in areas where they see rental demand is high combined with sustained high employment.

The Group includes other related businesses including Clear Mortgage Co which provides a fully regulated mortgage solution for their clients and Lamont Estates estates agency, letting and management company facilitates the whole aftercare experience for their investors and home owners.

Most of the team work from their Birmingham office but they also have offices in Dubai, Hong Kong and Malaysia.

Their total portfolio includes 19 New Build and Conversion projects with a total value of £154m.

Property details


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