Maynard Meadows, Deal -
Deal, Kent, CT14

Development Background

JaeVee has joint ventured with Roddy New Homes in offering equity investors the opportunity to invest in the development of a residential scheme based in Great Mongeham just outside of the seaside town of Deal, Kent.

The development comprises the erection of 12 residential dwellings, construction of vehicular access, with associated car parking and landscaping.

The residential units are a mixture of terrace, semi detached and detached houses all up to national space standards.

The GDV, which is the collective value that all 12 properties could be sold for, works out to a conservative forecast of £5,140,000. When determining a GDV, one uses sold comparables for similar properties in and around the local area typically within 5 - 10 mile radius for new build housing schemes. Details of the sold comparables we have used to determine the GDV can be analysed when downloading the Investment Memorandum from the Documents section above.

The construction costs have been priced at £1,132.28 per sq-m. A further 5% contingency for construction costs and 10% for professional fees has been added, which makes the costs above BCIS Online for the local area. These numbers are detailed within the Financials section below.

The proposed investment turnaround time is 18 months which is based on 12 months to build and 6 months to sell.

Strategy

The proposed exit strategy is to sell the units on the open market, with sales expected to begin 6 months before the completion of the construction works. As it's a 12 month construction programme, the marketing on the new houses will begin in month 7. This approach should ideally see some reservations of units secured before construction has been completed. Said approach helps to repay the senior debt facility without going too much into the 6 month sales period allocation, thus meaning any interest savings will create further profit for the SPV.

The houses will be marketed and sold via local estate agents, with the target market being a mixture of owner occupiers, first time buyers and single let landlords.

Based on sold comparables we expect to be able to sell the properties for the following prices:

3 bed terrace houses - £360,000-£370,000, 3 bed semi detached houses - £440,000-£485,000 4 bed detached - £550,000-£565,000

These sale estimates have been supported by a development sales appraisal report from LSL Land & New Homes, which is an estate agent based in the local area. The appraisal can be downloaded from the Documents section above. You'll note their GDV estimate totals £5,310,000 which demonstrates our targeted GDV of £5,140,000 is conservative. Should we be successful in selling the units for more than the GDV we've targeted, this will mean more profit for the SPV.

Senior and mezzanine debt will be repaid first together with the post sales costs and corporation tax set out in the financials section below. Investors will then be repaid their 40% share of the net profit pro rata to their shareholding.

Outcome

All the properties were successfully sold.