Latest Valuation
£2,000,000
ROCE
%
Location
Liverpool

Prime Liverpool Development Investment Opportunity

The plan is to purchase this commercial property with tenant in situ on long lease, with a planning application for circa 250 units.
Guide Price
£

Share this page

Enquire about this property

Key Features

  • Yield: 7.2 %
  • GDV: £49,000,000
  • Prime city centre development potential
  • 12 year lease in place with established architect firm paying £144,000 p/a.
  • 250 units

The Property

The property is a 7,200 sqft commercial property with an established tenant in situ paying £144,000 p/a on a 12-year lease. The property further benefits from a ‘landlord only’ 6 month break clause.

Within 9 months we will submit a planning application to demolish the existing premises and develop a luxury residential apartment scheme/ apart hotel featuring a world-class design and dual permissions for c.250 residential apartments and serviced accommodation. Planning permission is anticipated to be granted within 3 months of submission. Investors will be given the option to exit upon ‘planning gain’.

Once planning permission has been granted the break clause in the lease will be enacted and the existing property will be demolished. Development of the site will then begin with the construction period being anticipated to be 24 - 30 months.

The Financials:

Current Valuation: £2,000,000.

Projected valuation with 'planning gain': £4,000,000

Projected net profit with 'planning gain' after planning costs: £1,650,000

Total project development costs (inclusive of land purchase): £35,815,000.

Gross Development Value (GDV): £49,000,000.

Net development profit after costs: c.£10,000,000 - £11,000,000

Selling office: Sourced Alderley Edge

Planning Information

N/A

The Plan

Preference Share:

Minimum £25,000 investment in the form of a preference share paying a fixed return of 2% per month for a 12 month term. Parent company corporate guarantee (Balance sheet of £4,000,000)

Pure Equity:

Illustrated returns are based upon a £200,000 investment:

Option 1. Exit at Planning Gain:

12 month term.

Projected valuation with planning: £4,000,000.

Projected total net profit after costs: £1,650,000.

Projected investor share of profits: £165,000.

*Option 2. Exit at development practical completion:

36 - 40 months term.

Projected net profit after costs: £10,000,000.

Projected investor share of profits: £1,000,000.

Option 3. Retain completed units at cost in lieu of profit

*There are 3 distinct exit strategies at practical completion:

1. Sale of c.250 apartments totalling 140,000 sqft. The GDV has been calculated by closely analysing market comparables, which indicate a conservative sales price of c.£342 sqft.

2. c.250 unit Apart-hotel. Valuation has been calculated for 250 units at £150 per night at 74% occupancy, equating to an EBITDA of £4,000,000. The industry standard valuation multiple for apart-hotels is 12 – 14 x EBITDA, which achieves a valuation of £48,000,000 - £56,000,000.

3. Retain completed units at cost in lieu of profit. The investor can use equity as leverage for mortgages and potentially gear-up to own £4,000,000 worth of apartments at cost.

The financials:
▪ Current value: £2,000,000
▪ GDV: £49,000,000
▪ Total project development costs (inclusive of land purchase): £35,815,000.
▪ NET development profit after costs: c.£10,000,000 - £11,000,000
▪ Yield: 7.2 %

The Location

Liverpool is thriving with a booming population of young professionals and 70,000 students which is fuelling the rental market at a pace whereby demand is almost impossible to keep up with. The development site is a stone’s throw away from the historic Liver Building, Liverpool One Shopping & leisure district as well as hundreds of trendy bars and eateries.

An Ultra-prime investment area, currently undergoing major regeneration of high-end luxury buildings including some iconic towers. The area has huge potential for great capital growth and as such is a genuine investment hotspot, which is highlighted by two development schemes currently going through planning permission and expected to gain consent within a matter of weeks.

The first, for 552 apartments in Brunswick Quay, which would transform the local area is expected to cost in the region of £100m and promises to create 'high quality public amenity space'. The Second, in Princes dock promises 278 apartments on vacant land within a few hundred meters of the apartments for sale.

Average estimated value for a house in L3 6AA

£

According to Zoopla (and despite the global pandemic) the average house prices in Liverpool have risen by over 7% in the last 12 months. Further, Savills most recent housing price forecast estimates house prices with grow by 27.3% in the North West. Judging by Liverpool’s house price trends and the huge ongoing investment in the city, it is entirely plausible that the city could experience almost double the national growth by 2025.

Content missing