We are pleased to announce a new bond issue backed by a loan for the acquisition and refurbishment of a prime residential apartment in the heart of Mayfair Village, Central London, one of the most exclusive postcodes in the world.
Our Mayfair Village bond offers Advance Subscribers an annualised return of 9.5% over a 12-month term via exposure to a senior loan secured by a first legal charge against the property.
This is the first deal to be offered under our new Advance Subscription process, which allows investors to subscribe for bonds in advance of their actual issue and secure a higher yield. Following the advance subscription period, the bonds will be available for crowdfunding as normal, with the expected offered yield to be 8.7%.
● The property is a second-floor two bedroom apartment in super prime Mayfair
● Mayfair is in the West End of London in the City of Westminster and remains one of the most expensive and desirable places to live in London, and the world
● The property enjoys period features with high ceilings throughout, two double bedrooms and a spacious reception room. The Property is nearby to London’s Hyde Park and high-end shopping districts
● The senior loan is secured by a first legal charge against the property & the borrower's personal balance sheet. The borrower is an experienced property investor and developer
● Restriction on title in favour of the participating SPV
● The term of the underlying loan is 12 months
● We anticipate completion of the bond issue to be on 14th January 2018
● The coupon bonds are callable and shall be issued to offer a yield of 9.5%, paying a monthly coupon
Haven't done extensive DD here but I like the fact it is a monthly coupon. Always nice to get a trickle of payments to put towards other investments.
The 56 year lease isn't great given the exit strategy and looks like the biggest risk here given the state of London's high end property market. Given the loan is being used to refurbish the property this offsets the risk to some degree as it should add a little value.
If there were a good secondary market on PC I'd definitely invest. As there isn't I'll probably take a much smaller nibble.
Have taken a look at this - the valuation is worth reading.
Valuer has taken the "mid-term" lease into account by scaling the valuation back to 80% using industry tables
Purchase price is in excess of market value (valuer comments on this)
Mid-term lease properties can go for a bit of a premium because there may be stamp duty advantages to buying on the shorter lease and then extending lease post-purchase (and shorter lease properties are not such rareties in prime central London, so not quite the stigma it would be elsewhere)
No lift & this isn't a ground floor flat - somewhat limiting in a "luxury"market
On one of the better streets?
Rental yield appears to be 2.5% - par for the course in prime London
Accepted, central London resi is currently declining in value. However, given there is probably some development spend to come as they refurbish, the LTV isn't too bad for a conventional period flat that will always find a market (if you drop the price enough).
I've passed on most propertycrowd offerings, this one seems worthy of more detailed consideration (but beware whatever additional info gets posted before the deal goes live).
As an Advanced Subscriber in the Mayfair Village deal, we would like to update you on the completion timeline.
The Principal Lender had anticipated that completion would take place on or around 14 January. We have however very recently been informed by the Principal Lender that completion has been delayed.
The reason for the delay is that the Vendor is considering its tax implications for completing in this tax year. If the Vendor does decide to proceed in this tax year, we would estimate that completion will take place on or about 26 January.
If the Vendor decides to proceed in the next tax year, we will be revisiting the deal in March, and given your commitment, offer you a right of first refusal to make the same allocation request.
We expect to have an update from the Principal Lender early next week as to whether the deal will complete in January or be deferred until early in the new tax year.
We would like to apologise for any inconvenience caused by this change to the projected completion timeline.
Will be interesting to see how and if they plan to compensate for tying our money up. Many other P2P sites offer instant returns so you get something in the above situation. Reading the above it isn't clear and it sounds like that won't happen. If they just delay it and offer the exact same deal in a few months with no compensation I'll be unimpressed. Let's see how PC handle it....
Further to last week’s email, we are writing to confirm postponement of the Mayfair Village deal. As mentioned then, this change in timing is driven by the Vendor who has delayed the completion date of his purchase of the property to the new tax year.
The Principal Lender will be revisiting the deal in late March, at which time it is likely to be available for subscription on Property Crowd. At that point, we will offer you a right of first refusal to make the same allocation that you requested under the Advance Subscription offer.
We would like to apologise for any inconvenience caused by this change to the projected completion timeline. By their nature, deals offered for Advance Subscription are not finalised and therefore are subject to change or may not complete at all.
However, for this to happen to the first deal to be offered under our new Advance Subscription facility is very unfortunate. Therefore, as a one-off gesture of goodwill, we will credit your Standard account with a fee rebate of 0.5% of the funds you deposited to cover your subscription within the next few days.
Thank you for your patience, and please don’t hesitate to contact us if you have any questions.