Cambridgeshire ‘super house’ yields 23% return
BACKGROUND
Vine was invited to support a capital raise for the redevelopment of a large single dwelling in the
market town of St. Neots in Cambridgeshire. The property was located next to the River Great Ouse
and had a 300m frontage with private mooring.
OPPORTUNITY
An increase in hybrid working after the pandemic meant that there was greater demand for grander, more impressive homes by London professionals looking to live and work in more remote, tranquil locations. With this in mind, a local, experienced developer who had purchased this property for £1m pre-pandemic spent around £250k on planning applications and design to turn this already impressive property into a ‘super house’.
INVESTMENT METHOD
The investor’s capital would be repaid upon the completion of construction and the subsequent legal purchase of the property. Interest of 1% per month would be applied for a period of 9 months, and then a subsequent 2% per month applied for each month thereafter. The developer anticipated that completion would be within 9 months. However, it was agreed that if this was achieved, a fixed return of 9% interest on capital would be paid. Security on the investment came in the form of a first legal charge.
OUTCOME
The capital raise allowed the developer to recover his initial expenditure, and then develop the
property into a luxury high-end family home. An extension was built, the property refurbished and
a separate garage, gym, cinema room was built, with an adjacent annex.
Despite delays in construction due to the increase in material costs and market conditions, the sale completed just a few months later than anticipated. Investors who supported the capital raise received a profit of 23% return on investment which included default interest. This investment was active for 16 months.
