Being Socially Responsible in The Race for Space
I like to utilise my journals every month as a way to convey my experiences and inspirations in business. However, this journal is rooted firmly in the order of business for June, being our latest fund acquisition. It gives me great pleasure, blended with plenty of excitement, to announce we received planning consent on our latest residential development in Little Bytham, being situated in a harmonious environment in the beautiful county of Lincolnshire.
Our acquisition criteria is very much led by the financial bottom line. However, that primary objective is not exclusive in its own right, sat equally at the top of our feasibility profiling is the requirement to meet societal and local community needs. It should be of little surprise that doing the right thing morally can also reward the fund, fiscally. Let me explain…
The severe housing shortage in the UK, which very much peaks in England, specifically in the South East, the Midlands and East-Midlands, means of course those areas see high levels of consistent demand over supply. Property values in turn generally grow at a proportionally faster rate than the rest of the country. Subsequently, the government must stimulate house building and underlying that drive is the manifesto pledge from the last election, whereby the government pledged to deliver one million new homes within its 5 year term.
It is for that reason that schemes like the ‘Homes England – Home Building Fund’ were established. The so-called ”Housing Accelerator”. The cost of capital is lower than the high street, herein the note to our bottom line objective. The finance offers a government approved stamp mitigating any risk of capital funding whilst we meet the development terms of size, situation and social responsibility. In short, developments that meet the requirements must contain an ‘Affordable Housing’ component. And therein lies the satisfaction of our other primary objective, supporting society and local community. In broad terms as the land owner and property developer, being within our group, must develop a portion of the development to support the drive to deliver Affordable Housing. From there we have a very flexible disposal strategy, regardless of the housing market conditions, whereby we can even retain properties and employ a very attractive tax treatment via leverage, being tax free, and cash flowing properties that further the liquidity levels for the collective in our fund.
In conclusion, we have acquired a prime site in a highly sought after location, which feeds the so called ‘Race for Space’ in the property market in terms of 4 of the 8 properties we will build on site, being ‘Executive Homes’. The remaining 4 dwellings will conform to ‘Affordable and First Home’ criteria and herein we meet our objectives, and the criteria of our funders for the build element of the project. The capital stack will consist of our personal equity from Austin and myself, via the Alliance Fund, to acquire the site whilst funding for the build component will herald from the government to deliver this project. Meanwhile, our shareholders can benefit from seriously attractive returns as the NAV of the fund increases month by month and we will deliver much needed housing to the people who help make our local communities tick.
For further details on this lucrative opportunity, please log into the Shareholder Centre.
Remaining at your service
Iain Crawford, CEO.