In early 2015 we were approached by the St Andrew Partnership to raise funds for an “off market” Strategic Land Acquisition in Balbirnie, Scotland with the sole aim of obtaining residential planning permission on a 20 acre site. The fund raise proved successful and we now have exclusivity with St Andrew Partnership to raise funds for all future projects.
What is the investment?
Today more and more houses are required for the UK’s growing population and for this to happen land is required, but obtaining the necessary planning is far from easy and can be a lengthy and costly process.
The St Andrew Partnership, through their many contacts identify areas where there is at least a 70% certainty that planning can be obtained and using their professional contacts, architects, engineers etc, they aim to secure planning consent within a 30 month period. Throughout the planning process they also identify potential developers and once outline planning has been obtained they engage them in the specifics of the detailed planning process.
What is the role of Serignac?
Our role is to raise the funds required for each acquisition and to have a place on the board of each SPV (Special Purpose Vehicle), to ensure that the investor’s interests are looked after and that all funds raised are accounted for.
What returns can I expect?
There are many criteria that affect each planning application and ultimately the return. The main ones are, location, size of site and the eventual developer. Below is a brief example of the returns to be expected form the recent Balbirnie acquisition, where it is expected that investors will see a 372% return. There is a minimum investment of £10,000 but no maximum.
Initial Fund raise 342,000
Estimated Planning Costs 197,000
Management Costs 145,000
Land Sale at £300,000 per acre 6,000,000
Investors capital repaid 342,000
Performance Fee to St Andrew 560,000
Land Owners receive 70% 3,568,000
Investors receive 25% 1,274,300
Investor Management Fee 254,860
The investors original capital is returned as a priority before any other payouts are made.
As with any investment there is always an element of risk and this risk is usually related to potential return – the higher the return the higher the risk.
This investment is very clear cut, you either make a significant return if planning is granted or you lose your investment if it is refused, there is no inbetween.