Latest Valuation
£457,000
ROCE
%
Selling Agent
Sourced Uxbridge

STPP Commercial To Residential Conversion For 9 Apartments

Off-Market, Fully Managed Conversion in Lytham St Annes
Guide Price
£457,000

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Key Features

  • Prime Location
  • Planning due to be Granted withing 2 Weeks (June 2020)
  • 9 Stunning new Build Executive Apartments
  • Commercial Conversion
  • Ideal for Remote Investors
  • Fully Project Managed

The Property

This development has been sourced off-market from a vendor that has secured the site on an option. The vendor is a prolific developer and they are obtaining the planning permission to be able to sell on as a development opportunity. The property is currently an antiques auction center.

If the buyer is remote to the project, this allows the buyer to have a hands-off experience if they wish to, as they will have dedicated partners in the project and carry out extensive cost engineering
wherever possible.

However, in order to maximise the site new planning is being submitted by the option holder for 9 x 2-bed flats.

The vendor will be paying for the buyers to purchase legal fees for this transaction for a solicitor that’s on the panel of recommended lawyers.

The present building comprises an open plan auction room, with a shop front and ancillary areas:
Ground Floor GIA: 300 SQ M (3,229 SQ FT)
Uppers floors: not measured but currently being used as storage and music lessons

Storage units on upper floors currently used as storage - not tenanted

Tenure: The property is a virtual freehold with a 999-year lease that began on 9th November 1923. Meaning there are 904 years remaining on a ground rent which is a peppercorn amount. In order to develop the land, there is a freeholders contribution to pay to abide by the lease which is circa £30,000, this is disclosed within the appraisal.

There is not any residential space within the building currently.

The Financials:

GDV: £1,530,000 (AFTER CONVERSION)

Purchase Price: £457,000
Development: £500,000
RICS Project Management £39,900
SDLT £12,350
Legals: Split Title & Sales £6,000
FREEHOLDER CONTRIBUTION £30,000
Agents Fees £30,600
Finance Cost £95,712
Sourcing Fee 2% / £9,140

Building Survey £0
LEGAL PURCHASE £0
S106 £0
CIL £0

TOTAL COSTS / CASH BUYER £1,180,702

TOTAL PROFIT £349,298

RETURN GDV 23%
RETURN COST 30%

Finance;
FINANCED BUYER. WE HAVE LENDERS IN PLACE READY TO FINANCE
PLEASE NOTE THE FINAL FINANCE OFFERED WILL BE BASED ON YOUR PERSONAL CIRCUMSTANCES
THE FIGURES PROVIDED ARE FOR TYPICAL LENDING ON THIS TYPE OF PROPERTY

Finance to purchase;
Borrow 60% LTV of purchase price £457,000 = £274,200 Loan / £182,800 Deposit
100% Funding for build costs
Total Loan £774,200
One-off 2% Arrangement fee £15,484
The interest of 0.9% per month over 12 months. Total interest payable (incl. arrangement fee) = £99,098 (rounded up to £100,000)
Exit Fees: None

Money in
£182,800 Deposit
£39,900 in Project Management
£12,350 SDLT
£30,000 Freeholder Contribution
2% / £9,140 Sourcing Fee

TOTAL CASH IN £274,190

There are 3 exit strategies that can be adopted for this opportunity:
Strategy 1: Build to sell
Strategy 2: Build to Rent Residential
Strategy 3: Build to Rent FRI Lease

Strategy 1: Build to sell

A RICS survey report will be provided. We fully expect this to show at the very minimum the GDV of each apartment being £170,000 if not £185,000. However, for the purposes of this advert we will err on the side of caution and go with £170,000 as by the time this advert has been published, we don’t have the survey report back yet. You should be looking at selling off-plan and provide high quality Internal and external CGI’s. You’re target market would be both SA (Serviced Accommodation) investors as well as First Time buyers

Strategy 2: Build to Rent Residential

All units will be rented to the private rental market. The demographic would be working professionals or retired individuals. There is very good demand in the area due to a shortage of ready availability of modernised stock. Generally, people that live in this area rarely move so it makes it harder for newcomers to the area. This shortage of supply, in turn, drives up sales prices and also rents.

Post Development, refinance against GDV;
75% LTV of £1,530,000 @ 4% = £1,147,500 Loan. £45,900 per annum / £3,825 pcm
£1,147,500 pays original loan £774,200 + finance costs £100,000 + £274,190 of your initial capital invested. INFINITE RETURN

Cashflow Numbers
9 x 2 Bedroom Flats @ £650 per month £70,200 per annum
Total Gross Income £70,200 per annum

Less:
10% Management costs (incl VAT) £7,020 per annum
Mortgage £45,900 per annum

Circa Net Cashflow £17,280 per annum
Circa Net Cashflow £1,440 per month
ROI Infinite All money out

Please note – We have not deducted any amounts for insurance, maintenance or voids

Strategy 3: Build to Rent FRI Lease

FRI Lease
All residential units will be used as serviced accommodation by an in-place operator. They will offer a Fully Repairing and Insuring leases for five years
All maintenance will be carried out by the operator, so there is no management fee, no voids, and no repairs. There will be a tenant only break clause at the end of year 1
The rent reviews will be cap and collar with the retail price index, so rents are increased relatively in line with the market, they will pay you £500 per month for each of the 2 Bedroom Apartments. There is very good demand in the area due to a shortage of ready availability of modernised short stay accommodation for the popular seaside holiday destination.

Cashflow Numbers
9 x 2 Bedroom Flats @ £500 per month £54,000 per annum
Total Gross Income £54,000 per annum

Less:
Mortgage £45,900 per annum

Circa Net Cashflow £8,100 per annum
Circa Net Cashflow £675 per month
ROI Infinite All money out

Alternatively, a local SA operator can just manage as an SA unit at 15%.

Limited risk management;

GDV and PURCHASE PRICE
Verified by an RICS valuer and an RICS valuation will be provided. The value of Each unit as verified by local agents are between £180K - £185K. The values here are at £170K so extremely conservative. You will also save on survey costs as one is being provided

Planning
The option holder is paying for the planning fees and the buyer will not have to pay anything toward the planning.

DEVELOPMENT: 10% contingency built-in. SUBJECT TO DETAILED SURVEY & INCL OF VAT. Overseen by RICS Building Surveyor. Alternatively, you can use your own team.
The duration is estimated to be 12 months. The main contractor is registered with the Help to Buy Scheme and new build warranties can be put in place
Introduction to the main contractor can be made upon request along with a site visit to talk through the scheme. The price is subject to some slight changes when going to detailed design and tender, and the RICS Building surveyor will provide the full renovation schedule of works and specifications. The RICS Building surveyor will give the full renovation schedule of works and specifications. The builder has surveyed the building in detail and priced against the plans. A detailed schedule providing a breakdown of costs and timelines will be supplied. You have a choice to use your development team. The developer undertaking the conversion are specialists in this location, having carried out several developments in the area. A schedule of works (SOW) with a detailed breakdown of costs and timelines can be sent on request.

PROJECT MANAGEMENT £39,900 INCL VAT - Project Managed by RICS Building Surveyor of Carter Zub Building Consultancy
An RICS building surveyor will act as the contractor overseeing all works. The works have been costed already, and a schedule of works provided.
You have a choice to use your project management team. Introduction to the main contractor can be made upon request along with a site visit to talk through the scheme. The project managers job is to take care of the development and deliver the job on time and within budget, subject to unexpected circumstances arising.
All payments will be verified by the RICS building surveyor via payment certificates to ensure that payment is made for only works that have been completed. Meaning all payments will be made in arrears. The project manager will administer all of the paperwork concerning the building works, including a JCT contract between you, the client and the contractor. Also, a service agreement between the project manager and you the client. Throughout the project, the project manager will provide weekly updates via written, photo and video updates. The surveyor’s details/contact can be sent on request.

Process:
- NON- REFUNDABLE deposit to reserve: £10,000, which is deducted from the purchase price
- As this is NON-REFUNDABLE, please ensure you've done your research before paying this. It's your responsibility to make sure you're happy before moving ahead. This deal is an auction style deal where there is one week to exchange (the vendor will agree 5%, but in the event of buyer default 10% is due and payable) from paying the deposit and 28 days to complete from planning being granted. Therefore before paying the deposit, make sure you've carried out your due diligence.

Freeholder Contribution
£30,000 plus legal costs. Upon completion of the development the Freeholder would ask for confirmation as to the values of the units at the time to compare with figures produced on 31st May 2018. They reserve the right to charge a further premium if there is any substantial variance beyond 5%

STAMP DUTY £12,350
Commercial Rates

PURCHASE LEGALS £0
The vendor will pay for the buyers to purchase legal fees up to £1,500 including VAT in turn for the buyer using a solicitor that is recommended. The vendor is willing to do this for fast exchange and completion as he knows the solicitors can achieve this

OTHER LEGALS
All other legal costs are paid for by the buyer. i.e. splitting titles & sales. Estimated based on an average of £500 per unit + VAT which is £5,400, rounded up to £6,000

Exchange
5 %. The exchange will be subject to achieving full planning permission for 9 x 2 bedroom units. As soon as planning achieved you, the buyer will have 28 days to complete but you are more than welcome to start works in that 28 day period.

Sold As Seen
The development opportunity is sold as seen and all numbers provided are a guide only based on professional opinions and should not be solely relied upon. You must do your own due diligence and seek professional advice if necessary.

Planning Information

Fylde Council (https://new.fylde.gov.uk) 20/0245

The Plan

The Financials:

GDV: £1,530,000 (AFTER CONVERSION)

Purchase Price: £457,000
Development: £500,000
RICS Project Management £39,900
SDLT £12,350
Legals: Split Title & Sales £6,000
FREEHOLDER CONTRIBUTION £30,000
Agents Fees £30,600
Finance Cost £95,712
Sourcing Fee 2% / £9,140

Building Survey £0
LEGAL PURCHASE £0
S106 £0
CIL £0

TOTAL COSTS / CASH BUYER £1,180,702

TOTAL PROFIT £349,298

RETURN GDV 23%
RETURN COST 30%

Finance;
FINANCED BUYER. WE HAVE LENDERS IN PLACE READY TO FINANCE
PLEASE NOTE THE FINAL FINANCE OFFERED WILL BE BASED ON YOUR PERSONAL CIRCUMSTANCES
THE FIGURES PROVIDED ARE FOR TYPICAL LENDING ON THIS TYPE OF PROPERTY

Finance to purchase;
Borrow 60% LTV of purchase price £457,000 = £274,200 Loan / £182,800 Deposit
100% Funding for build costs
Total Loan £774,200
One-off 2% Arrangement fee £15,484
The interest of 0.9% per month over 12 months. Total interest payable (incl. arrangement fee) = £99,098 (rounded up to £100,000)
Exit Fees: None

Money in
£182,800 Deposit
£39,900 in Project Management
£12,350 SDLT
£30,000 Freeholder Contribution
2% / £9,140 Sourcing Fee

TOTAL CASH IN £274,190

There are 3 exit strategies that can be adopted for this opportunity:
Strategy 1: Build to sell
Strategy 2: Build to Rent Residential
Strategy 3: Build to Rent FRI Lease

Strategy 1: Build to sell

A RICS survey report will be provided. We fully expect this to show at the very minimum the GDV of each apartment being £170,000 if not £185,000. However, for the purposes of this advert we will err on the side of caution and go with £170,000 as by the time this advert has been published, we don’t have the survey report back yet. You should be looking at selling off-plan and provide high quality Internal and external CGI’s. You’re target market would be both SA (Serviced Accommodation) investors as well as First Time buyers

Strategy 2: Build to Rent Residential

All units will be rented to the private rental market. The demographic would be working professionals or retired individuals. There is very good demand in the area due to a shortage of ready availability of modernised stock. Generally, people that live in this area rarely move so it makes it harder for newcomers to the area. This shortage of supply, in turn, drives up sales prices and also rents.

Post Development, refinance against GDV;
75% LTV of £1,530,000 @ 4% = £1,147,500 Loan. £45,900 per annum / £3,825 pcm
£1,147,500 pays original loan £774,200 + finance costs £100,000 + £274,190 of your initial capital invested. INFINITE RETURN

Cashflow Numbers
9 x 2 Bedroom Flats @ £650 per month £70,200 per annum
Total Gross Income £70,200 per annum

Less:
10% Management costs (incl VAT) £7,020 per annum
Mortgage £45,900 per annum

Circa Net Cashflow £17,280 per annum
Circa Net Cashflow £1,440 per month
ROI Infinite All money out

Please note – We have not deducted any amounts for insurance, maintenance or voids

Strategy 3: Build to Rent FRI Lease

FRI Lease
All residential units will be used as serviced accommodation by an in-place operator. They will offer a Fully Repairing and Insuring leases for five years
All maintenance will be carried out by the operator, so there is no management fee, no voids, and no repairs. There will be a tenant only break clause at the end of year 1
The rent reviews will be cap and collar with the retail price index, so rents are increased relatively in line with the market, they will pay you £500 per month for each of the 2 Bedroom Apartments. There is very good demand in the area due to a shortage of ready availability of modernised short stay accommodation for the popular seaside holiday destination.

Cashflow Numbers
9 x 2 Bedroom Flats @ £500 per month £54,000 per annum
Total Gross Income £54,000 per annum

Less:
Mortgage £45,900 per annum

Circa Net Cashflow £8,100 per annum
Circa Net Cashflow £675 per month
ROI Infinite All money out

Alternatively, a local SA operator can just manage as an SA unit at 15%.

Limited risk management;

GDV and PURCHASE PRICE
Verified by an RICS valuer and an RICS valuation will be provided. The value of Each unit as verified by local agents are between £180K - £185K. The values here are at £170K so extremely conservative. You will also save on survey costs as one is being provided

Planning
The option holder is paying for the planning fees and the buyer will not have to pay anything toward the planning.

DEVELOPMENT: 10% contingency built-in. SUBJECT TO DETAILED SURVEY & INCL OF VAT. Overseen by RICS Building Surveyor. Alternatively, you can use your own team.
The duration is estimated to be 12 months. The main contractor is registered with the Help to Buy Scheme and new build warranties can be put in place
Introduction to the main contractor can be made upon request along with a site visit to talk through the scheme. The price is subject to some slight changes when going to detailed design and tender, and the RICS Building surveyor will provide the full renovation schedule of works and specifications. The RICS Building surveyor will give the full renovation schedule of works and specifications. The builder has surveyed the building in detail and priced against the plans. A detailed schedule providing a breakdown of costs and timelines will be supplied. You have a choice to use your development team. The developer undertaking the conversion are specialists in this location, having carried out several developments in the area. A schedule of works (SOW) with a detailed breakdown of costs and timelines can be sent on request.

PROJECT MANAGEMENT £39,900 INCL VAT - Project Managed by RICS Building Surveyor of Carter Zub Building Consultancy
An RICS building surveyor will act as the contractor overseeing all works. The works have been costed already, and a schedule of works provided.
You have a choice to use your project management team. Introduction to the main contractor can be made upon request along with a site visit to talk through the scheme. The project managers job is to take care of the development and deliver the job on time and within budget, subject to unexpected circumstances arising.
All payments will be verified by the RICS building surveyor via payment certificates to ensure that payment is made for only works that have been completed. Meaning all payments will be made in arrears. The project manager will administer all of the paperwork concerning the building works, including a JCT contract between you, the client and the contractor. Also, a service agreement between the project manager and you the client. Throughout the project, the project manager will provide weekly updates via written, photo and video updates. The surveyor’s details/contact can be sent on request.

Process:
- NON- REFUNDABLE deposit to reserve: £10,000, which is deducted from the purchase price
- As this is NON-REFUNDABLE, please ensure you've done your research before paying this. It's your responsibility to make sure you're happy before moving ahead. This deal is an auction style deal where there is one week to exchange (the vendor will agree 5%, but in the event of buyer default 10% is due and payable) from paying the deposit and 28 days to complete from planning being granted. Therefore before paying the deposit, make sure you've carried out your due diligence.

Freeholder Contribution
£30,000 plus legal costs. Upon completion of the development the Freeholder would ask for confirmation as to the values of the units at the time to compare with figures produced on 31st May 2018. They reserve the right to charge a further premium if there is any substantial variance beyond 5%

STAMP DUTY £12,350
Commercial Rates

PURCHASE LEGALS £0
The vendor will pay for the buyers to purchase legal fees up to £1,500 including VAT in turn for the buyer using a solicitor that is recommended. The vendor is willing to do this for fast exchange and completion as he knows the solicitors can achieve this

OTHER LEGALS
All other legal costs are paid for by the buyer. i.e. splitting titles & sales. Estimated based on an average of £500 per unit + VAT which is £5,400, rounded up to £6,000

Exchange
5 %. The exchange will be subject to achieving full planning permission for 9 x 2 bedroom units. As soon as planning achieved you, the buyer will have 28 days to complete but you are more than welcome to start works in that 28 day period.

Sold As Seen
The development opportunity is sold as seen and all numbers provided are a guide only based on professional opinions and should not be solely relied upon. You must do your own due diligence and seek professional advice if necessary.

The Location

Nearest stations;
Ansdell & Fairhaven (0.1 mi)
Lytham (1.3 mi)
St. Annes-on-the-Sea (1.6 mi)

The site is within an area of considerable charm and character.

The area has good transport links with the M55 within a 10-minute drive. Bus routes are available linking into all major networks. Blackpool airport is also within a short 15 minutes drive from the site while Lytham train station is within a short drive

The site is located on Kingsway, Andell. The site can be accessed directly off Kingsway. Opposite the site, there is a garage sales forecourt. The area is mainly residential with close proximity to Woodlands road shopping area

St Anne's on the Sea lies on the sandy Fylde coast in Lancashire just south of Blackpool. St Anne's is brimming with tradition, Lancashire's friendliness, charm, and style. St Anne's was developed to cater for holidaymakers from around the country earlier in the last century and did it very successfully. It still attracts visitors today with new family attractions. The town centre's spacious Square has undergone major investment and regeneration which exudes a continental atmosphere.

The property is located just off the Lytham St Annes seafront with a short distance from Lytham center and Royal Lytham Golf course

The Development is situated just off the promenade of Ansdell Lytham St Annes, which has a strong demand for high-end luxury apartments. The site is placed in a fantastic location only a short walk from Fairhaven Lake, one of the jewels of the Fylde coastline.
Also, easy access is Ansdell high street and the center of Lytham which is one of the most prestigious residences to live in the UK.
Only around the corner is the exclusive Royal Lytham golf course where the Open golf championship is played.

Sought after location in the affluent town of Ansdell, Lytham St Annes.

It is located on Kingsway, which is accessed off Woodlands Road. It is within walking distance of the train station, local supermarket, local shops, and amenities. The surrounding areas also include dense residential areas. Ease of access is available on the coast road / Promenade and towards Fairhaven Lake. Ease of commuting is available towards Lytham and St Annes as well as Blackpool.

Average estimated value for a house in FY8

£178,306

The average price paid for a 2 bed flat in FY8 is £178,306 at £224 per sqft

Local Area Averages - Postcode - FY8 1AE;
Last 5 years postcode house price growth: 14.80%

GDV: £1,530,000 This is supported by sold and for sale 2 Bedroom apartments nearby:

Rightmove Sold. First part of Postcode. This area only. Type – Flat.

£175,000 Sold Aug 2019 Flat 86, Majestic, Clifton Drive North, Lytham St Annes, Lancashire FY8 2PH
https://www.rightmove.co.uk/house-prices/detailMatching.html?prop=61228155&sale=56360141&country=england

£187,500 Sold Dec 2019 Flat 15, Lowood Lodge, Lowther Terrace, Lytham St Annes, Lancashire FY8 5QG
https://www.rightmove.co.uk/house-prices/detailMatching.html?prop=75602744&sale=90366309&country=england

£199,000 Sold Apr 2019 61 Woodlands View, Lytham St Annes, Lancashire FY8 4EF
https://www.rightmove.co.uk/house-prices/detailMatching.html?prop=67250188&sale=9457372&country=england

£199,950 Sold Aug 2019 25, Madison Heights, Coopers Row, Lytham St Annes, Lancashire FY8 4UD
https://www.rightmove.co.uk/house-prices/detailMatching.html?prop=64023341&sale=10753087&country=england

£205,000 Sold May 2019 28 Sunningdale Court, Lytham St Annes, Lancashire FY8 3UP
https://www.rightmove.co.uk/house-prices/detailMatching.html?prop=57943416&sale=9942670&country=england

Date Sold Price Type Address
11/05/2018 £195,000 2 Bedroom Flat Flat 2, Crystal Lodge, 71 Clifton Drive, Lytham St Annes, FY8 1BZ
14/06/2018 £173,000 2 Bedroom Flat 58 Orchard Road, Lytham St Annes, FY8 1PG
01/06/2018 £178,000 2 Bedroom Flat Flat 3, Crystal Lodge, 71 Clifton Drive, Lytham St Annes, FY8 1BZ
28/11/2018 £175,000 2 Bedroom Flat 2, The Gables, 35, Orchard Road, Lytham St Annes, Lancashire FY8 1PG
14/12/2018 £205,000 2 Bedroom Flat 18, The Gables, 35, Orchard Road, Lytham St Annes, Lancashire FY8 1PG
02/01/2019 £168,000 2 Bedroom Flat 1, The Gables, 35, Orchard Road, Lytham St Annes, Lancashire FY8 1PG
11/01/2019 £175,000 2 Bedroom Flat 7, The Gables, 35, Orchard Road, Lytham St Annes, Lancashire FY8 1PG
22/03/2019 £250,000 2 Bedroom Flat 19, The Gables, 35, Orchard Road, Lytham St Annes, Lancashire FY8 1PG
29/03/2019 £205,000 2 Bedroom Flat 17, The Gables, 35, Orchard Road, Lytham St Annes, Lancashire FY8 1PG
29/03/2019 £175,000 2 Bedroom Flat 4, The Gables, 35, Orchard Road, Lytham St Annes, Lancashire FY8 1PG
12/06/2019 £188,000 2 Bedroom Flat 16 The Gables, 35 Orchard Road, Lytham St Annes FY8
28/06/2019 £180,000 2 Bedroom Flat 11 The Gables, 35 Orchard Road, Lytham St Annes FY8
Average Price £188,917

The main comparable development to this one is The Gables 35-39 Orchard Road, Lytham St Annes. It is a development of 19 x 2 Bedroom new build apartments. The Gables site is located in a slightly worse location than Kingsway and they are selling for a minimum £25,000 more than we have in for our end values. If the GDV was calculated at the average sold price, the GDV would be £1,700,253. Which is just shy of £200,000 more than we have projected. So the numbers presented are certainly conservative.

One investor who has been buying for a few years now numerous BMV commercial to residential conversion projects from the seller has used the recommended build team, project management and the end to end services and was pleased to see figures, time-frames and GDVs holding true. His quote: "Working with the teams was easy, trustworthy and reliable. Their teams are well versed in dealing with projects and investors alike. I don't live locally so having hands-on support as and when needed was critical to seeing our projects through. I wholly recommend working with them and see massive value in their turnkey service." Tiruven, UK Property Investor