OPTIMISING THE OPPORTUNITY...
- London remains an important national and international hub and can be expected to recover before other regions in the UK.
- 230,000 new households are formed annually (1), yet new house production for 2009 & 2010 is estimated at 75,000 per year (2).
- The pool of professional tenants is growing due to the restricted availability of credit.
- The Halifax index comparing house prices to earnings has fallen to its lowest level since 2002 (3).
- Savills forecast London house price growth of 35% from 2010 to 2014 (4).
Sources
(1 and 2) New Homes Marketing Board / Property Investor News, May 09.
(3) Halifax, April 09.
(4) Savills / Property Week, April 09.
Five year annual investor returns
If average property price growth is… 1.4% pa 4.0% pa 6.8% pa
Average internal rate of return (IRR) 6% 10% 14%
£20,000 after five years becomes £26,750 £31,500 £36,200
Percentage return 33.75% 57.5% 81%
EXPERIENCE PAYS...
Excalibur Property Investment Management is headed by two experienced property professionals who have been advising individual, corporate and institutional investors for more than 40 years.
Nicholas Dare BSc (Hons) MRICS has worked for Richard Ellis and Jones Lang LaSalle Chartered Surveyors, as well as acting as Property Investment Adviser for a €8million residential fund. He has advised on over £1billion of commercial and residential property.
Edward Redstone has worked for BDO Stoy Hayward Corporate Finance, Hanover Druce plc and London Financial Services. For the last 14 years he has been working as an investment advisor to high-net-worth individuals and companies, specialising in the acquisition, letting and management of more than £500 million of residential property in central London.
REDUCING THE RISK...
- Investments to be spread over diverse, well-established areas.
- Fund is not reliant on house price growth to generate returns.
- Any bank-borrowing will be non-recourse to investors.
- UK-registered limited partnership.
- Investors will benefit from Asset Manager’s expertise and market knowledge.
INVESTMENT STRATEGY
The Excalibur London Fund will target particular types of property:
- one- and two-bedroom existing flats, within a 30-minute commute to central London
- located in established locations with existing infrastructure, transport links and local amenities
- un-modernised with an element of refurbishment / redevelopment potential
Properties will initially be acquired using equity. Following refurbishment, the Fund intends to borrow against the enhanced value to acquire subsequent properties.
The Fund intends to enhance returns through prudent borrowing, with a maximum LTV of 65%.
TARGET INVESTMENT LOCATIONS
Battersea
Bayswater
Chelsea
Fulham
Hammersmith
Islington
Kensington
Notting Hill
Pimlico
Westminster
DISTRIBUTION OF RETURNS
After repayment of bank debt and investors’ initial equity, net profits will be divided between Fund investors and the asset manager as follows:
Average annual return % for investors /asset manager
Up to 8.00% 100% / 0%
Above 8.01% 75% / 25%*
* of the amount over and above 8.01%
The asset manager is incentivised, through the profit share, to maximise the performance of the fund.
