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Southern House - Mezzanine Finance

Magna Riverside, Flambard Way, Surrey

£255,000

Funded

£255,000

Total Fund

Term (Months)
10
Target Interest Rate (p.a.)
13.5%
Strategy
Mezzanine Finance
Minimum Investment
£250
Login to invest
Debt Deal
IF ISA
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

  • PDR conversion in Godalming, Surrey

  • 2nd charge loan, 10 month term
  • Less than 75% loan-to-value
This is an opportunity to invest in a Bond whose proceeds will be used in the completion of a Permitted Development Rights (PDR) conversion in Godalming, Surrey.

The development was started in 2017 and is due for practical completion at the end of January 2019. Following a dispute with the original contractor a new contractor has been appointed and the final works are about to restart.

The funds raised will be deployed as a 2nd Charge Loan to be repaid using the sales proceeds once the senior lender has been repaid and before any Dividends are paid or any capital is returned to the Developer. The Borrower has the option to redeem the loan anytime after month 6.

The Gross Loan is 75% of the projected Gross Development Value including all fees and interest. As the development is almost complete we believe the Gross LTV to be an appropriate indicator of the degree of leverage.
The developer, Magna has experienced an increase in costs due to some unexpected works and has also had to replace the original contractor.

The Senior Lender, Avamore is renewing their facility to enable completion of the development but the project requires an additional sum of £211,205 to complete the construction.

The majority of the conversion has been completed to a good standard according to the most recent Monitoring Surveyor’s report. Six of the units have been sold and reservation fees have been provided by another buyer, representing, in total, just over £1.5m from the £4.8m GDV. 

Works to complete includes:
- Finishing Flats 1 & 7
- Works to the common areas
- External works and access roads
- Carpeting and finishing throughout

The development will deliver:
- 2x Studios
- 12x One Bed Apartments
- 3x Two Bed Apartments 

The property is situated on the periphery of Godalming, about 1 minute from the town centre where there are a good range of amenities and facilities and easy access to the station.

Projected returns

Fixed Return Debt Investment 
  • 10 Month Term
  • Bond Issue: £255,000****
  • GDV: £4,779,500***
  • Loan: £250,000*
  • Maximum LTV: 75%**
Issuer: CL Number Twenty Nine Limited
  • Number of Bonds available: 1,020
  • Value of Each Bond: £250
  • Security: 2nd Charge, Debenture and Personal Guarantees
  • Projected Fixed Return : 13.5% p.a., minus basic tax rate deducted at source
* Excluding Fees and Interest 
** Including Fees and Interest
*** GDV is an estimate based on recommendations of the acting agent. (See page 9 of the Investment Summary for recent comparable sales.) 
**** £5,000 of the £255,000 Bond issue is used to cover legal fees and expenses

Income is not guaranteed and there is a risk of capital loss. Please see pages 12 and 13 of the Investment Summary for further information about risks

Property name: Magna Riverside

Address: Flambard Way, Godalming, surrey, GU7 

Property type: Flats - PDR Conversion

Property age: 2000+

Market type: Young professionals

Description: The property is situated on the periphery of Godalming, about 1 minute from the town centre where there are a good range of amenities and facilities and easy access to the station

Local Property Market

An ancient market and coaching town delightfully situated on the picturesque River Wey, where to this day cattle graze on the waterside meadows and canal boats rest up against the wharf.

Godalming boasts many local, wonderful attractions such as National Trust properties, the town’s sports facilities and historic and cultural places of interest.

Local festivals abound and a warm welcome is assured. Unique, historic and interesting architecture can be found in abundance in the High Street and Church Street along with walks in our delightful countryside.
   

Key Terms

Issuer:CL Number Twenty Nine Limited registered in England and Wales with company number 11575710 office is at Lance Levy Farmhouse, Wildmore Lane, Hook, Hampshire, RG27 0HB
Amount1,020 Bonds of nominal value of £250 each
Interest Rate:Projected 13.5% per annum, simple interest (basic rate tax deducted at the source)
Interest PaymentAll accrued interest to be paid in one lump-sum on the Maturity Date
Default Interest Rate3% above the Interest Rate, but subject to recovery of the same under underlying Loan
Maturity Date10 months after allotment
Minimum Subscription1 Bond
Purpose
The proceeds of the Bond issuance shall be used by the Company to participate in a Loan as a lender to MAM (Southern House) Limited to enable it to complete the conversion of Southern House, Godalming GU7 1HH
Documentation Bond Instrument and this Term Sheet
Governing LawEnglish

Summary of Projected Returns

Investment Period10 Months
Target Total Return11.25%
Target Annualised Return 13.5%
Returns not guaranteed

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. 

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.

We have given this project a score of A, which we believe reflects lower returns balanced against generally lower risk. You should judge the risk for yourself using the information provided and your own investigations.

 

Projected Capital Returns

We include a CrowdLords Risk Rating to illustrate where the investment lies on our internal Risk Return Profile. Where risks are higher it is usual to expect a higher potential 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:
Market Sensitivity – the less the return is impacted by changes in Market prices, the lower the risk
Cost Sensitivity – the less the return is impacted by any increases in cost, the lower the risk
Time Sensitivity – the less the return is impacted by any extensions to the time line, the lower the risk
Minimum Preferred Return – the higher the minimum preferred return as a proportion of the projected return, the lower the risk
Track Record – the greater the experience of the Developer, the lower the risk.


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

Magna Group works on the ethos that luxury and excellence should not be confined to a certain size or a certain place. They have a strong vision to develop intelligent and interesting urban living spaces in new build and regeneration schemes.

Magna’s approach is to purchase undervalued assets such as commercial office buildings, brown field sites and run down property in the commuter belt, turning them into high quality, high specification and affordable homes.

They are committed to bringing together exceptional levels of quality, expertise and total commitment to urban revival. Their building architecture is always sympathetic with the immediate local environment, whether restoration and conversion of old or new buildings.

The hallmark of Magna developments is high quality, contemporary, intelligent design utilising natural light too create clean, uncluttered living spaces. Interior design maximises the use of space. Materials are carefully chosen for their quality and ability to age gracefully whilst remaining timeless. Fixtures and fitting are high quality from prestigious manufacturers.

Property details

Further Questions

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