Description

 

Borrower SMEDD Property Ltd
Property 5 Ballalease West, Donabate (the “Property”)
Security A first collateral charge over the property listed above. A first charge over the shares in the borrower company. An SPV will be formed to manage this development loan.
Facility Amount €750,000
Total Asset Value €1,400,000
Interest 8% per annum
Purpose Development Loan
LTV (Loan To Value) 54%
Term 18 months (12 months minimum)
Repayment Sale of the developed property

Loan Overview

This is a development loan to SMEDD Property Ltd. The company is a newly created development compamny. UpSPACE have assembled and headed the delivery of the SPV for this project and the assembly of the project team. UpSPACE will project manage the development using UpSPACE accredited collaborators using experienced design and construction teams.

The Property consists of a 0.20Ha residential site (the “Property”). The Borrower has sought to obtain planning permission to construct 6 unit residential apartment scheme. The purpose of this loan is to allow the Borrower to finance the construction of the apartment development. The planning application has been lodged and should take approximately 2 to 4 months. Upon securing the planning permission, the SPV will seek the finance in order to develop the 6 residential units.

The estimated valuation of the Developed Residential Property is €1,400,000 and is in excess of the loan amount sought.

The Developed Residential Property has been valued by qualified valuer in the Feb 2020 and the development loan sought is for €700,000 or 54% of the valuation. This finance is only for construction costs and there is no finance on the site.

The Loan

The proposed  loan has a maximum term of 18 months and a minimum interest period of 12 months. This means that lenders will receive at least 12 months’ worth of interest payment even if the Property sells and the loan is repaid before the expiry of the 12 month term.

The loan carries an interest rate of 0.66% per month which is the equivalent of 8% per annum.

The loan is secured by a charge over the Site and Developed Residential Property and by a charge over the shares in the Borrower company. This effectively gives the lenders the right to sell the Property if the loan is not repaid at the end of the loan period.

Risk Warning

UpSPACE have compiled this report on behalf of our lenders and have taken reasonable care to ensure the information provided is authentic and accurate. Please be aware that returns are not guaranteed, and your capital is at risk. Please also note that the term is not certain and may be extended under certain circumstances. Investors should seek their own advice before investing.

The Borrower

The Borrower is a SPV that has been assembled by UpSPACE on behalf of the owner in order to develop the site and the project will be project managed by a development team led by UpSPACE.

The team development team assembled is as follows;

We will seek its incorporation documents as part of our legal due diligence and our security will include a charge over the shares of the company allowing us control in the event of default.

As there is no prior trading there is no trading, profit and loss or financial position to consider.

Security

The principal security for this loan is a charge over the Residential Property and by a charge over the shares in the Borrower company.

Proposed Development Schedule

The Proposed Residential Development will compromise the following;

 

Floor Unit Description Expected Sale Price
Ground 1 1 bed. 45 sq.m Apartment €210,000
2 1 bed. 45 sq.m Apartment €210,000
3 1 bed. 45 sq.m Apartment €210,000
4 1 bed. 45 sq.m Apartment €210,000
First 5 2 bed. 80 sq.m Aaprtment €275,000
6 2 bed. 80 sq.m Aaprtment €275,000

 

Location:

The Property is situated on the in the village of Donabate and is within a 5 minute walk of the Dublin-Belfast train line. The property is easily accessed via the nearby M1 motorway, and is a 15 minute drive from the M50, and a 30 minutes drive from Dublin City Centre and 15 minutes drive to Dublin Airport. It is within easy reach of the neighbouring towns of Swords, Malahide and Rush/Lusk and the major international employer at Dublin Airport. It is located along the well serviced Dublin Bus route 33 to Dublin.

Planning

Planning has been sought in Feb 2020 and will be examined as part of our normal legal due diligence but the Residential Property is currently used for residential purposes – and we do not expect to encounter any issues around planning.

Term and exit

It is proposed to have a term of 18 months on this facility.

We do not expect that the sale and subsequent closing period will take 18 months but have allowed this term to cover any eventualities.

There is a built-in 12-month minimum term therefore even if the property were to sell immediately and close within a normal 1 to 2-month timeframe all lenders will earn a minimum of 8% on their short-term investment.

In regards to the exit, the purpose of this loan is to allow the SPV to finance the development of the project. Upon securing the planning permission, the SPV will seek the finance in order to develop the residential units. on sale of the developed property the SPV will exit the loan.

The Developed Property is valued at €1,400,000 by a qualified valuer in the February 2020 and the development loan sought is for €700,000 or 54% of the valuation.

Conclusion

This is a development facility secured against a property. The following factors make this a strong investment;

– The investment is for 18 months but has a minimum term of 12 months guaranteeing a minimum return of 8%.

– The property is in an area that in demand from locals and also has great connectivity and is close to both the M1 & M50 Motorways for those working in Dublin.

– UpSPACE has assembled a development team headed by a project manager with extensive experience working with UpSPACE collaborators on the design and construction teams who have all myriad experience on similar projects.

– Our loan-to-value (LTV) rate of only 54% provides significant comfort even in the event the Property did not achieve its full asking price of €1,400,000.

– Strong security where should the Borrower fail to secure the planning permission the loan facility will not be made available.

Please refer to the Facility Agreement for a full disclosure of terms.