Shojin Property Partners launches new crowdfunding investment opportunity
Shojin Property Partners has launched a new crowdfunding investment opportunity for a newly built, student property block in Nottingham.
The block consists of 124 newly-constructed studios which are 100% let for the academic year of 2018/2019. The units are being managed by an experienced national student block manager.
A recent formal valuation of the block was conducted by a top tier surveyor in September 2018, which valued it at £12.06m. There is a £6.4m senior loan secured by a first charge against the property, which replaced the development loan. This will be a joint venture with the Developer, with funding and profits to be split equally between the Developer and Shojin and Investors.
Shojin participated in the development phase of the project by providing funding to the developer. The total crowdfunding equity is £1.27m from investors, with a minimum investment of £5,000.
Investors are targeted to earn an income return of 6.3% per annum on average, paid quarterly over the course of the three-year term. (This excludes the expected capital growth). Over the three-year term of the investment, investors are targeted to receive a return on invested capital (ROIC) of 48% (or 16% annualised) which includes capital growth in the value of the asset.
It is intended the property will be held for three years and is expected to generate an average gross rent of just under £1m per annum. There is also the expected benefit from the growth in value of the property over the investment term. The anticipated exit for the investment is a sale to a third party.
Jatin Ondhia, pictured, CEO of Shojin Property Partners commented:
“This student property development is a great crowdfunding opportunity and from as little as £5,000, people can invest in this scheme and hope to receive c.16% per year, which in this market, is better than having your money in the bank earning 2% pa, at best.
“This property is in a great location, just a few minutes’ walk to Nottingham Trent University and close to the City Centre’s shops, bars and restaurants. Finished to a high quality, the studios provide students with comfortable and affordable accommodation, which is in short supply in the City.
“According to UCAS (The Universities and Colleges Admissions Service) in 2017, 84,000 applications were made to Nottingham’s higher education institutions. Further findings show there were only 13,600 purpose-built student beds available from the University of Nottingham and Nottingham Trent University.
“There is huge demand for purpose-built student accommodation for both universities in Nottingham and this new investment opportunity offers 100% occupancy for the current academic year, with excellent rental yields.”