residential rents receivable - platform one · 2018-12-12 · residential rental portfolio 9 uk...

Residential Rents Receivable

S E C U R E D L O A N N O T E

+ 4 4 ( 0 ) 1 2 1 2 3 7 4 6 1 0

W W W . P R O S P E R I T Y - W E A L T H . C O . U K

Contents Page

Key Features 3

Our Vision 4

Why Invest with Prosperity 5

Why Invest in the UK Property Market 6

Regional Trends in UK Residential Property Prices 7

UK Housing Shortage 8

Residential Rental Portfolio 9

UK Rental Prices 10

Annual Change in Residential Rents 11

Secured Loan Note Terms 12

Example of Prosperity Wealth 50/50 Purchase Plan 13

The Management Team 14

Important Notice and Risk Warning 15

Important NoticeThis document is a summary of the terms of the loan agreement and related security documents, and it should not be relied upon in isolation. You should

seek independent financial advice before investing. The company does not provide and is not authorised to give, financial advice and the information in this

summary should not be treated as advice. Advisers, and prospective investors not taking independent advice, should read and ensure they understand

the loan agreement and related security documents and should make their own further enquiries. Please contact the company if you need any additional

information or wish to review the working files.

• 8% interest income per annum paid 2% per quarter

• Term of 3 years

• Secured against a residential rental portfolio of 276 apartments valued at £23.6m

• Portfolio rent income of £1.49m per annum or £9.8m over the term of the 50/50 Purchase Plans

• Security over the assets of the company including assignment of the rental contracts

Important NoticeThis document is a summary of the terms of the loan agreement and related security documents, and it should not be relied upon in isolation. You should

seek independent financial advice before investing. The company does not provide and is not authorised to give, financial advice and the information in this

summary should not be treated as advice. Advisers, and prospective investors not taking independent advice, should read and ensure they understand

the loan agreement and related security documents and should make their own further enquiries. Please contact the company if you need any additional

information or wish to review the working files.

Key Features

4Important Notice: This document is a summary of the terms of the loan agreement and related security documents, and it should not be relied upon in isolation. You should seek independent financial advice before investing. The company does not provide and is not authorised to give, financial advice and the information in this summary should not be treated as advice. Advisers, and prospective investors not taking independent advice, should read and ensure they understand the loan agreement and related security documents and should make their own further enquiries. Please contact the company if you need any additional information or wish to review the working files.

To build and create desirable homes

and investment opportunities to a global

audience by delivering high grade residential

developments within prime

UK locations.

O U R V I S I O N

Important Notice: This document is a summary of the terms of the loan agreement and related security documents, and it should not be relied upon in isolation. You should seek independent financial advice before investing. The company does not provide and is not authorised to give, financial advice and the information in this summary should not be treated as advice. Advisers, and prospective investors not taking independent advice, should read and ensure they understand the loan agreement and related security documents and should make their own further enquiries. Please contact the company if you need any additional information or wish to review the working files.

F A C I L I T A T I O N B U S I N E S S E S W I T H I N T H E P R O S P E R I T Y G R O U P

Our in-house mortgage broker,

Verve, provides residential investment

mortgage solutions to our clients.

We also have a sales, letting and

management agency, Lamont Estates,

who offer our owners a full lettings

and management solution.

Why Invest with Prosperity

Founded in 2007, the Prosperity family of companies was born out of a passion to deliver affordable, buy-to-let

opportunities to a global audience. Energised by the sheer wealth of opportunity within the property sector,

Prosperity has already made its mark throughout the UK, with developments built and sold across key locations

and dedicated to offering investors an opportunity to invest in the UK’s number one asset class.

O F F I C E L O C A T I O N S

With the majority of the team based

at our Birmingham office HQ, we also

have offices in Dubai, Hong Kong and

Malaysia.

W H O W E A R E

A Birmingham based developer,

building and delivering desirable

apartments and offering an innovative

buy-to-let proposition to the private

investor.

O U R T E A M

Over 30 strong and all passionate

about property; working with the

very best industry professionals

and funders to deliver our projects.

O U R D E V E L O P M E N T S

Located throughout the UK where

rental demand and yields are high,

within areas of sustained high

employment, with a focus on

Birmingham and the Midlands.

P R O J E C T P O R T F O L I O

A residential and commercial

portfolio including 29 new build

and conversion projects.

5

D E M O G R A P H I C S

The UK is the third most populated state in the Europe, indicating a high demand for all types of commercial and

residential property.

O U T L O O K

41%Percentage of investors who feel positive about 2018 and

believe that their UK portfolio will continue to achieve growth.

R E N T A L D E M A N D

43 million

43 million households rent in the UK. Generation Rent undeniably represents a huge opportunity

and target market for developers and the buy-to-let investor.

6

https://www.landlordnews.co.uk/index-of-private-housing-rental-prices-for-great-britain-february-2018

Department for International Trade, UK Capital Investment Portfolio

Buy Association Investor Survey 2018

Why Invest in the UK Property Market

R E G E N E R A T I O N

£1bnRegional UK cities are flourishing.

Birmingham alone has undergone a transformation, with major

developments such as Paradise & Arena Central underway, and

a planned £1 billion regeneration scheme for the arrival of HS2.

R E N T A L P R I C E S

15.9%Increase in private rental prices

between January 2011 & June 2018

E C O N O M Y

Stability

Despite economic concerns following Brexit, the UK economy has demonstrated resilience in a number of markets. Additionally, property price increases have

remained positive.

N A T I O N A L G R O W T H

56%Property price rise over the next decade. Whilst London is still the

most expensive city, investors are now looking nationwide for the

best yields, house price growth, and entry points.

C O N N E C T I V I T Y

HS2The £56 billion project will bring

new business opportunities and continued growth to the cities

along its route. London along with Birmingham, Manchester, Liverpool and Leeds are envisaged to have a city centre HS2 station by 2033.


7

Regional Trends in UK Residential Property Prices June 2018


Scotland Average property price £156,578Monthly change 1.4%Annual change 2.8%

North East Average property price £149,098Monthly change -0.5%Annual change -0.1%

Yorks & Humber Average property price £192,861Monthly change 1.3%Annual change 4.0%

East MidlandsAverage property price £222,877Monthly change -0.2%Annual change 4.6%

North WestAverage property price £196,450Monthly change 1.1%Annual change 4.9%

West MidlandsAverage property price £226,264Monthly change 0.4%Annual change 5.5%

WalesAverage property price £194,028Monthly change 0.8%Annual change 5.0%

South WestAverage property price £312,201Monthly change 1.1%Annual change 3.7%

South EastAverage property price £412,073Monthly change 0.1%Annual change 1.2%

Greater LondonAverage property price £613,737Monthly change -0.9%Annual change -1.0%

East of EnglandAverage property price £360,071Monthly change 0.7%Annual change 2.4%

Increase from the previous month

Decrease from the previous month

8

Changing demographics mean the UK

must build a minimum of 250,000 new

homes per year to meet the rising demand.

H O U S I N G S H O R T A G E


KPMG Shelter Report on UK Housing Demand 2015

Residential Rental Portfolio

9


Southend on-Sea

DudleyPeterborough

KeighleyNottingham

Derby

Prosperity commands a wealth of experience in the UK residential property market, having successfully led

multiple property acquisition and regeneration ventures across the country. All of Prosperity’s developments

are designed and modern open plan layouts with medium to high standard interiors.

No. of Apartments

Valuation(£)

Rents Receivable(£)

Annual Rental Income (£)

% Portfolio

Bramble Court, Derby

The Parade, Worksop

Trent House, Newark

Varity House, Peterborough

Prosperity House, Derby

Priestgate House, Peterborough

The Pinnacle, Southend-on-Sea

Bentley Court, Keighley

Parkwood Court, Keighley

Castle Court, Dudley

4

4

1

13

24

4

2

92

88

44

361,000

390,000

100,000

1,550,000

3,320,000

740,000

325,000

6,430,000

6,180,000

4,265,708

160,185

116,241

38,995

522,923

1,001,180

158,335

112,788

2,909,439

2,819,839

1,988,147

21,900

18,300

5,040

95,718

168,540

33,900

21,600

426,900

411,000

289,200

1%

1%

0%

6%

11%

2%

1%

29%

28%

19%

Total 276 23,661,708 9,828,073 1,492,098

Interior specification

Breakdown of the Residential Portfolio

Worksop

10

All regions to the UK have experienced

annual increases in rents from 2010.

U K R E N T A L P R I C E S


https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/indexofprivatehousingrentalprices/previousReleases

Annual Change in Residential Rents


https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/indexofprivatehousingrentalprices/previousReleases

11

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annualised change in average private rents

London England excluding London

Bramble Court, DerbyAverage annual rent £5,475Monthly rent £456

The Parade, WorksopAverage annual rent £4,575Monthly rent £381

Trent House, NewarkAverage annual rent £5,040Monthly rent £420

Varity House, PeterboroughAverage annual rent £7,363Monthly rent £614

Prosperity House, DerbyAverage annual rent £7,023Monthly rent £585

Priestgate House, PeterboroughAverage annual rent £8,475Monthly rent £706

The Pinnacle, SouthendAverage annual rent £10,800Monthly rent £900

Bentley Court, KeighleyAverage annual rent £4,640Monthly rent £387

Parkwood Court, KeighleyAverage annual rent £4,670Monthly rent £389

Castle Court, DudleyAverage annual rent £6,573Monthly rent £548

Rents of Residential Portfolio

IssuerResidential Rents Receivable Secured Funding Limited

Business Address Unit 1, JQ1, 32 George Street, Birmingham, B3 1QG

Amount being raised £3m

Return 8% per annum paid @ 2% per quarter

Term 36 months

50/50 Purchase Plan

A deferred payment plan whereby a property investor

pays up to 50% of the purchase price of a property.

The balancing payment is then paid to Prosperity Wealth

from the rental income. Prosperity Wealth has security over

the property and an assignment over the rental income.

No. of apartments in portfolio 276

Description of apartments Newly refurbished 1 & 2 bed apartments

Total value of residential portfolio £23.6m

Annual gross rental income £1.49m

Total rents to be collected over term of 50/50 Purchase Plan

£9.8m to be collected from the future receivables and paid

to Prosperity Wealth under the 50/50 Purchase Plan.

Security

A charge over the assets of the company including

an assignment of the rental contracts including total

receivables of £9.8m from a portfolio of 276 residential

apartments with an annual receivable of £1.49m.

Collateral account or reserve bank account to facilitate the repayment of the loan notes

The annual receivables after the management charges

and interest payments are to be held in a collateral

account, or reserve accounts for the repayment of the

loan notes with £1m per annum being transferred to the

bank account to repay the loan notes of £3m.

Interest coverage ratiosThe annual interest charge of £240,000 is covered 6.25

times by the annual receivables of £1.49m.

SUMMARY TERMS

Secured Loan Note Terms

12


Example of Prosperity Wealth

50/50 Purchase Plan

13


Summary of 1 bed apartment £ GBP

Purchase Price £63,000

Legal Fees £850

Total Amount Due £63,850

Reservation & Exchange Stage

Prosperity Reservation Deposit 3% £3,000

Legal Fees £850

Reservation / Exchange stage total due £3,850

Monthly Deposit Payment of 50% £30,000

Deposit divided by 24 month build schedule £7,500

Rental Payment of 50%

Balance of purchase price payable from rental income £30,000

Year 1 rental repayment £4,800







Bentley Court, Keighley

Property investor pays 50% of the purchase price in installments.

The balancing 50% is paid to Prosperity Wealth from the rental income.

Prosperity Wealth have security over the property and an assignment over the rental income.

Interior shots

M A R T I N G R I F F I NC O M M E R C I A L D I R EC TO R

A property finance professional with extensive funding

experience at organisations such as Merrill Lynch and

Barclays Bank, Martin has property development and

delivery experience as a finance and project director.

He is a Fellow of the Institute of Chartered Accountants,

member of the Association of Corporate Treasurers

and the Project Management Institute.

J O E B I L L I N G H A MFO U N D E R & C H A I R M A N

Founder and chairman of the Prosperity Family of

Companies, Joe’s passion for property as the No. 1

asset class has been widely documented. With 25

years of living and breathing the property industry. As

Chief Executive Officer, Joe continues to drive forward

the business plan.

The Management Team

14

ST U A R T M I L L A R DF I N A N C I A L C O N T R O L L E R

Stuart is a Member of the Association of Accounting

Technicians and is responsible for the financial control

and day to day administration of the company.


Important Notice and Risk Warning

This document is a summary of the terms of the loan note, and it should not be relied upon in isolation. You

should seek independent financial advice before investing and read this document in conjunction with the

legal documents. The company does not provide and is not authorised to give, financial advice and the

information in this summary should not be treated as advice.

Advisers and prospective investors should read and ensure they understand the loan note and related

security documents and should make their own further enquiries if required. Please contact the company

if you need any additional information or wish to review the working files. While this loan investment offers

an annual return of 8%, it is important to remember that the investment it is not suitable for everyone and is

to paid from the net rental income on a portfolio of residential property.

Potential investors are strongly recommended to consult an independent adviser who specialises in

investments of this nature before making any decision to invest. The interest will be paid gross, and the

investor will be responsible for their own taxation affairs and compliance. The following risk factors are

considered the key risk factors:

• The interest payment and the return of capital are reliant on the collection of rental income from a

portfolio of residential property.

• The loan investment should be viewed as a medium-term investment. You should not invest if you are

likely to require the capital back in the short term.

• The company’s business plans are based on its understanding of current law, regulation, taxation and practice in the United Kingdom. Adverse changes in these may impact the business plan.

• The company retains property professional, a panel of experienced professional and external advisers to assist in assessing and managing these risks and is dependent on retaining the skills of these

professional.

• This investment is not covered by the Financial Services Compensation Scheme.

• The investor is responsible for their own taxation affairs and compliance.

I N F O @ P R O S P E R I T Y - W E A L T H . C O . U K

UK

+44 (0) 121 237 4610

JQ1, 32 George St, Birmingham B3 1QG

residential rents receivable - platform one · 2018-12-12 · residential rental portfolio 9 uk...

Documents