Following the first sale of one of our investment properties on the open market, of which you can read more here, we are pleased to report that we have now completed the sale of a second investment property.
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. The deal completed last month and funds have now been returned to investors.
The agreed sale price was £326,000 – 25% higher than the initial purchase price and £1,000 more than the latest valuation by an independent RICS surveyor. Prior to sale, 12 Kings Highway, Plumstead was trading on the Resale Market at a 14% discount to the latest valuation.
For investors who bought shares when the property first launched on our platform in June 2015, this represents a 27% total return (capital gain, plus dividend income) after fees and costs.
“The late tenancy end date and the time taken to carry out works to prepare the property for sale meant that market conditions unfortunately had worsened in the time between making the recommendation to sell and putting the property on the market. That said, the sale price exceeded the valuation of the property in March 2018, and is a material increase on the original purchase price.
We’re glad to have delivered a very positive outcome for investors, despite the market moving away from us. It is the good properties that can still sell in weaker market conditions, and this sale was not down to luck but quality of property selection.”
Robert Weaver, Chief Investment Officer
The below table outlines the key metrics achieved on sale:
|Property capital returns||Initial purchase price – in June 2015||£260,000||25% gain on initial purchase price|
|Latest valuation – as of March 2018||£325,000|
|Final sale price – agreed September 2018||£326,000|
|Returns for clients||Initial purchase price (including costs)||£268,100||18% capital return after all fees and costs|
|Final proceeds of the sale (after tax and professional fees)||£315,600|
|Total return (including dividends paid)||£341,214||27%|
How are the other three properties progressing?
Flat 6 Oldham House, Ilford
Update: Flat 6 Oldham House, Ilford has been sold and funds returned to investors, Dec 2018. 43% total return achieved.
You can read more about the sales process for Flat 6 Oldham House, Ilford here.
15 Heathlands Way, Hounslow
Update: exchanged, subject to contract.
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 sale has been agreed at £322,500, 30% more than the initial purchase price. Contracts have been exchanged and we expect to complete on the property in 4-6 weeks. We will notify investors when their funds are returned to their account, along with any capital gains.
Woodgate Court, Hornchurch
Update: not sold, and now retenanted. Trading and dividends recommenced.
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 resumed on the Resale Market. The dividend has been reinstated, 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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