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

Severn Street - 24 Month Interim Equity

Severn St, Birmingham


£488,700

Funded

£488,700

Total Fund


Term (Months)
24

Projected Annualised Return
13.5%

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


  • Central Birmingham new build development
    An opportunity to invest in a central Birmingham new build development of premium one and two bedroom apartments. This significant development in a prime location will deliver 35 apartments to meet the needs of young professionals looking to rent in the city centre.
  • All units have been pre-sold
    The development will start this summer and is due to complete in Q1 2019. All units have been pre-sold by Prosperity to their investment buyers and will be delivered under a fixed price JCT contract. With this tranche, Prosperity are raising equity for the purchase of the site targeted for September 2017, subject to planning, and offering a fixed return of 13.5% p.a. using our Interim Equity arrangement.
  • Redeemable Class B shares will receive a fixed return
    In return for an investment, holders of Redeemable Class B shares will receive a fixed return that equates to around 10.5% of projected net profits after tax. This will be paid as a capital gain when the shares are redeemed at a price of £1.27 per share, 24 months after the start date.
Summary
  • Prime B1 postcode location
  • 35x, 1 and 2 bed luxury apartments to meet the demand from young professional tenants
  • All units pre-sold by Prosperity to investment buyers
  • Shares will be redeemed at a pre-agreed price of £1.27
  • 24 month investment 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. You may also consider that all units are pre-sold and that the construction costs are fixed on a bonded JCT contract.

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: Severn 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 support a prime development of 1 and 2 bed luxury apartments, right in the centre of Birmingham. The developer has secured the site and is working alongside the local planning department to ensure that the resultant scheme sits comfortably amongst the historic and characterful buildings that surround it.  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.

Severn 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 £410,000
Stamp Duty £16,200
Legal & Professional Fees £304,000
Development Costs £3,681,315
Contingency Allowance £146,023
CrowdLords Fees £35,000
Total Investment £4,592,538
Less Development Finance & Deposits -£4,103,838
Remaining Funds Required * £488,700
Other Shareholders -£287,000
Total Redeemable B Shares £201,700

* Shares may be issued in Tranches to avoid delays

 

Capital Returns


Gross Development Value* £5,477,387
Market Growth** £0
Gross Sales Price £5,477,387
Total Investment -£4,592,538
Sales & Finance Costs -£241,382
CL Growth Fees -£18,260
Gross Profit £625,207
Corporation Tax -£118,789
Projected Net Profit £506,418
Projected Total Capital Return 103.6%
Share of Equity held as Redeemable B Shares 41.27%
Share of Growth Paid to Crowd Investors*** 26.1%
Capital Return to Investors £54,448
Projected Capital Return to Investors 27.0%

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

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

*** Redeemable B Class Shareholders are eligible to 13.5% of capital growth p.a.

 

Return Summary


Investment Period 24 Months
Projected Total Return 27.0%
Projected Total Annualised Return 13.5%

CrowdLords Development Analysis


Risk Return Profile*

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

* The Risk Return Profile for Developments 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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