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Severn House - Full Equity

Severn St, Birmingham

£248,513

Funded

£248,513

Total Fund

Term (Months)
24
Projected Annualised Return
18-22%
Strategy
Leveraged Development
Minimum Investment
£1,000
Login to invest
Full 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

  • Prime Central Birmingham location


  • All units pre-sold to investment buyers

  • 30x 1 and 2 bed luxury apartments

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 30 apartments to meet the needs of young professionals looking to rent in the city centre.

The site now has full planning and detailed design is underway.  All units have been pre-sold by Prosperity to their investment buyers and will be delivered under a fixed price JCT contract. The purchase of the site will be completed in September 2018.

With this tranche, Prosperity are raising full equity to refinance Interim Equity investors and offering two classes of share depending on the level of investment. The term is projected to be 2 years and total returns are projected to be 44% for Ordinary Class B shares (>£10,000 investments) and 36% for Ordinary Class C shares (for investors investing between £3,000 and £10,000). Investors should note that projected returns are not guaranteed.

Projected returns

Ordinary Class B Shares
  • For investors investing £10,000 or more
  • Projected Return of 22% p.a.**
  • Over 24 months*
  • Minimum Preferred Return of 16% p.a.***
Ordinary Class C Shares
  • For investors investing between £3,000 and £10,000
  • Projected Return of 18% p.a.**
  • Over 24 months*
  • Minimum Preferred Return of 13% p.a.***

*Target start date is 31st August 2018. 
** 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 

Address: Birmingham

Property type: Flat - Purpose built

Property age: 2000+

Market type: Young professionals

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 and 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.

The graph at right shows the average house price increases per annum for Birmingham compared with the rest of England and Wales over the last 20 years.
 

Capital Investment

Purchase Price£700,000
Stamp Duty£35,000
Legal & Professional Fees£456,206
Development Costs£4,552,067
Contingency Allowance£120,774
CrowdLords Fees£24,850
Total Investment£5,888,897
Less Finance & Deposits-£4,970,840
Remaining Funds Required *£918,057
Ordinary A Shares - Developer Equity£669,544
Ordinary B Shares - Crowd Equity£200,000
Ordinary C Shares - Crowd Equity£48,513


 

Capital Returns

Value Creation£1,486,798
Finance Costs£371,822
Sales Cost£46,196
CL Growth Fees£11,685
Corporation Tax£200,848
Developer's Share£750,758
Capital Return to Investors £105,490

 

Return Summary

Investment Period24 Months
Projected Total Return42.4%
Projected Annualised Return 21.22%

 

CrowdLords Development Analysis

The blocks shown in the "Risk Analysis" chart illustrate the CrowdLords Risk Rating. It shows where the investment lies on our internal Risk Return Profile. 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. We rate Risk across 5 parameters and grade them as being A, B, C, D or E. A being lower Risk according to our criteria.
 

Market Sensitivity


The Market Sensitivity analysis illustrates how the annualised return might change if the GDV of the project either increases by 5%, or decreases by 5%, between now and when the project is completed. 

As market conditions also tend to have an effect on how long properties take to sell, it also shows the impact of the project taking up to 3 months more, or 3 months less, than planned.
 

Cost Sensitivity


The Cost Sensitivity analysis projects how your annualised returns might vary either as a result of unexpected costs increasing the development costs by 5% or as a result of unexpected reductions in costs by 5%.

Given that a significant proportion of the costs are related to the cost of finance, it also shows how the time taken to complete the project might impact your annualized returns.

NB: This analysis is based on the figures provided at the time of listing and it is not unusual for these to change before the project is started.
 

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, an estates agency, letting and management company faciltating 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

Further Questions

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