We’re very pleased to report that we’ve sold one of our investment properties for the very first time, and have achieved a total return of 43% after all fees and costs. Read on to learn more, and for updates on the other three properties involved in a sale process.
In June 2018, we identified four properties on our platform that represented a great opportunity to sell and realise a significant capital return for our investors in advance of their respective five year anniversaries. Investors in each of the properties voted overwhelmingly to sell, and our team started the sale process.
We are delighted to have now sold the first property, Flat 6 Oldham House, Ilford, for £235,000. That represents a 42% increase on the initial purchase price and is £10,000 more than the latest valuation by an independent RICS surveyor. Prior to sale, Oldham House was trading on the Resale Market at a 13% discount to the latest valuation.
Investments made in the property when it was first brought to the platform in February 2015 have achieved a 43% total return (capital gain, plus dividend income) after fees and costs.
“When we embarked on this process in June, the market was quite different to the uncertainty that we’re currently experiencing in the lead up to Brexit – in fact, I’d say it’s now very much a buyer’s market. Despite this, the sale is a cracking result, crystallising gains into real cash for our investors in challenging market conditions.”
Robert Weaver, Director of Property
The below table outlines the key metrics achieved on sale:
|Property capital returns||Initial purchase price – in March 2015||£165,000||42% gain on initial purchase price|
|Latest valuation – as of March 2018||£225,000|
|Final sale price – agreed September 2018||£235,000|
|Returns for clients||Initial purchase price (including costs)||£170,000||30% capital return after all fees and costs|
|Final proceeds of the sale (after tax and professional fees)||£221,631|
|Total return (including dividends paid)||£242,353||43%|
How are the other three properties progressing?
12 Kings Highway, Plumstead
Update: completed on 18 December 2018.
12 Kings Highway, Plumstead was put on the market in late August after the tenants had vacated the property and minor works were carried out to prepare it for sale. We accepted an offer in early September, however, the property was part of a long chain which delayed exchange of contracts.
We have now completed the sale for £326,000 – 25% higher than the initial purchase price and £1,000 more than the latest valuation by an independent RICS surveyor.
Shareholders in Kings Highway will receive further information and final proceeds in January 2019, once completion accounts have been prepared.
15 Heathlands Way, Hounslow
Update: still on the market.
15 Heathlands Way, Hounslow had the latest tenancy end date of the four properties, with the tenants vacating on 28 September. The property was made ready for sale and put on the market in November.
The property is currently under offer and, if we are able to conclude the sale at the offer price, will represent an increase of more than 30% on the initial purchase price.
Woodgate Court, Hornchurch
Update: not sold, and now retenanted. Trading and dividends to recommence.
Woodgate Court, Hornchurch was put on the market in early September, after the tenancy end date and the required redecorating was carried out. Unfortunately, there were very few viewings and no serious offers.
Local market conditions and broader economic uncertainty meant that it was unlikely that we would achieve a sale price in line with expectations at the time of the shareholder vote in June 2018. We have therefore re-tenanted the property on a six month tenancy.
We still believe this property offers the opportunity for substantial capital return on investment. Any future recommendation to sell this property will be put back to an investor vote.
At 11am on Thursday 10 January 2019, trading in the property will resume on the Resale Market. The dividend will be reinstated from 1 January 2019, and the first payment will be made on 5 February 2019.
Important notice: Capital at risk. The value of your investment can go down as well as up. The Financial Services Compensation Scheme (FSCS) protects the cash held in your Property Partner account, however the investments that you make through Property Partner are not protected by the FSCS in the event that you do not receive back the amount that you have invested. Forecasts are not a reliable indicator of future performance. Gross rent, dividends and capital growth may be lower than estimated. 5 yearly exit protection or exit on platform subject to price & demand. Property Partner does not provide tax or investment advice and any general information is provided to help you make your own informed decisions. Customers are advised to obtain appropriate tax or investment advice where necessary. Before investing please read Key Risks.
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