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Darwin Street Redeemable B - Interim Equity

58-66 Darwin St, Birmingham

£174,745

Funded

£200,000

Total Fund

£150,000 minimum raise
Term (Months)
18
Projected Annualised Return
14.0%
Strategy
Leveraged Development
Minimum Investment
£1,000
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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

  • Prime Central Birmingham location


  • 75% of units pre-sold to investment buyers

  • Bonded, fixed price JCT contracts

This significant development by Prosperity is our 6th project with this developer. Located south of Birmingham Grand Central Station in an area generally known as Southside, it is a purely residential development that will deliver:

•37 x one bed luxury apartments
•51 x two bed luxury apartments
•3 x three bed apartments
•24 parking spaces

The site has been acquired following a positive pre-planning meeting with Birmingham City Council and a Full Planning Application is being prepared for submission in December 2018.

CrowdLords will be issuing four classes of share, depending on the level of investment:
• Share Class B - For investors investing £25,000 or more, with a projected return of 24% p.a.
• Share Class C - For investors investing between £10,000 - £25,000, with a projected return of 20% p.a.
• Redeemable Share Class A - Invest from £1,000, with a projected return of 15% p.a.
• Redeemable Share Class B - Invest from £1,000, with a projected return of 14% p.a.

Prosperity will be under a Put Option to buy back all Crowd Shares if planning permission is not secured within 12 months of the shares being issued. The price will give a 14% p.a. return for Redeemable Class B shares, 15% p.a. return for Redeemable A and Ordinary C shares and a 16% p.a. return for Ordinary B shares.

The site is located to the South East of Birmingham City Centre between Digbeth and the suburb of Balsall Heath. Its proximity to the city centre and to major redevelopments in Digbeth make it an attractive site being just 1.2 kilometres from the Bull Ring shopping centre and 1.4 km from New Street Station and the HS2 site.

The site is in an area that is primarily industrial and is currently occupied by the old East End Foods depot which has now ceased operations.

Due to the topography the building has been divided into three separate blocks each with its own main entrance which can be accessed directly from Darwin Street. The ground floor accommodates the parking, a large cycle store and other shared amenities.

The architectural style is industrial and uses industrial materials including black corrugated metal and vertical zinc standing seam metal cladding systems, with dark coloured bricks to the ground floor.
The Main Contractor will be on a bonded, fixed price, JCT contract to minimise construction cost risk and 75% of the units will be sold off-plan to mitigate some of the sales risk, but to also enable the project to benefit from the current trend in Birmingham prices.

Projected returns

Redeemable Class B Shares
  • Invest from £1,000
  • Total Projected Return of 21% (14% p.a.*)
  • Fixed term of 18 months
Other investment options
  • Redeemable Class A Shares, minimum investment - £1,000
  • Ordinary Class B Shares, minimum investment - £25,000
  • Ordinary Class C Shares, minimum investment - £10,000

* Projected return to be paid as a capital gain if circumstances make it possible to do so 



Property name: Darwin Street 

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. Darwin 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.

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£1,200,000
Stamp Duty£54,000
Legal & Professional Fees£1,074,530
Development Costs£12,428,871
Contingency Allowance£558,242
CrowdLords Fees£112,500
Total Investment£15,428,513
Less Finance & Deposits-£13,177,891
Remaining Funds Required *£2,502,520
Ordinary A Shares - Developer Equity£1,252,520
Ordinary B Shares - Crowd Equity£525,000
Ordinary C Shares - Crowd Equity£200,000
Redeemable A Shares£200,000
Redeemable B Shares£200,000


 

Capital Returns

Value Creation£18,568,733
Gross Development Profits£3,140,590
Finance Costs£1,911,246
Sales Cost£46,196
CL Growth Fees£21,580
Corporation Tax£220,698
Net Profits after Tax£940,870
Share of Net Profits Paid56.54%
Total Distribution to Crowd Shares£532,000
Capital Return to Redeemable Class B Investors £42,000

 

Return Summary

Investment Period18 Months
Projected Total Return21.0%
Projected Annualised Return 14.0%

 

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.

The Market Sensitivity analysis is an average across all share classes.
 

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 annualised 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.

The Cost Sensitivity analysis is an average across all share classes.
 

About the CrowdLords Risk Analysis

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:
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

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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