The Point, Pennar Park, Pembroke is a site where 63 out of 120 houses have already been built. All of the infrastructure is currently in place including roads, Ocean Way and Haven Drive. The drainage is also constructed.
The site is well established and has a mix of both residential and holiday let houses. Pennar Point is a secluded site approximately 1 mile west of Pembroke town centre. Pennar 18 hole Golf Course is immediately to the east.
The Site is surrounded to the north by Milford Haven, the Pembroke river inlet to the east and the Pembroke river to the south which leads to Pembroke town centre and Pembroke Castle.
Security is being offered by way of a first charge on 10 plots which includes Plots 60 to 64 inclusive, Plots 83 to 86 inclusive and Plot 88. All plots have planning ref. 12/0892/PA
These plots have been valued at £125000 each, although the RICS valuer has recommended these are reduced by 40% in value in case all the plots have to be sold as one. On further discussion with the RICS valuer we have placed a value of £70,000 on each plot from which we are initially prepared to release £468,000; 66.8% LTV.
The strategy is for the borrower to build 5 detached 4/5 bedroom houses on plots 60-64 whilst retaining plots 83-86 and 88 for a 2nd phase. The houses being constructed are two styles offering 4 and 5 bed detached properties of 1364 sq ft and 1745 sq ft. The RICS valuer believes the houses are worth £375,000 and £425,000 providing a GDV of £1,975,000 + vacant plots of £350,000 = £2,325,000.
The cost of constructing the 5 houses is estimated at £645,000 and we have agreed to lend £475,000 towards this, released in phases upon verification of the IMS Surveyors report. With fees, interest and contingency running at around £301,000 the project is expected to make a profit of £679,000.
Project build time scale is 8-10 months and we have agreed a maximum 18 month loan term to allow for unforeseen delays and marketing time. The borrowers plan to pay back early through a mixed strategy of both selling the houses on the open market, or refinancing and letting them out as holiday lets. The 18 month loan term is a maximum period - 6 month minimum term. Given there are 10 individual plots part repayment of the loan is likely and we have agreed phased repayment at a minimum of £250,000 tranches.
Total funding agreed £943,000 providing a 46.7% LTV (incu. rolled up interest) on the estimated out turn sale prices.
|Minimum 6 month Loan||Full 18 month loan period|
This is a straight forward new build project with an experienced developer using an experienced local team who have already successfully developed on the site.
The developer expects the 5 properties to be built and sold within 12 months, but we have planned in 18 months to allow for any delays.
With a low Loan to end GDV of just 47%, there is plenty of equity if the developer has to use their second exit strategy of refinance, if for any reason the first exit strategy of sales take longer than expected.
We are delighted to give this project the CrowdProperty stamp of approval.
* Please see full risk statement here.
† Estimated Sales Value is more formally referred to as GDV - Gross Developed Value
‡ Interest Cover is a measure of the project's ability to cover the interest payments from profits and is calculated by dividing the Projected Return on Costs by the Total Interest incurred throughout the loan period