87-unit London residential scheme

The project consists of the demolition of four existing residential blocks and the construction of four new ones together accommodating a total of 87 apartments. Planning consent is in place for the demolition of two of the four blocks and the refurbishment of the other two. Once the site is acquired, the development company intends submitting an application to the planners requesting that the other two blocks be rebuilt instead of refurbished. The enhanced scheme will further improve profitability and make the development more efficient and attractive. The following summary financials are based on the consented scheme.

Summary (consented scheme)

LocationLondon (Zone 2)
Investment structureJoint venture with development company
Gross Development Value£35m
Planning consentGranted
Total expected cost£29.7m
Expected project profit before tax£5.03m
Expected project duration30 (+5)  months
Number of apartments87
Average price per apartment£600-£690 per square foot
Profit share (investor/developer)60:40
PROJECT FUNDING 
Equity£5.55m
Senior debt£15.4m
EXTERNAL INVESTMENT REQUIRED 
Equity required
£5m
Expected ROI30% per annum