For the past 12 months, Serignac Limited have been instrumental in fund raising for the above and as the fund raise nears its close, we have been given exclusivity to raise the final £500,000.
What is the investment?
The Vikare Fund was set up in 2012 with the sole purpose of acquiring a derelict hotel site named Mille Pini, set in the heart of Tuscany.
The site was purchased for an initial 1million euros, and the mangers of the fund have since gained full planning permission to knock down and rebuild the site with up to 94 apartments. Design work is now well under way and yoo hotels, (www.yoo.com) have agreed to be the hotel operator, which is a major coup for the fund, as yoo are world renowned hotel design/operators, and Mille Pini will fall under their yoo collection brand.
The final raise is required in order to complete all the design work, both external and internal, and to allow yoo to commence pre sales of the apartments.
Once the above work is complete, Vikare will then put the development up for sale, and from a recent Knight Frank valuation the minimum asking price will be set at 6 million euros. Once all fund raising is complete no more than 3 million euros will have been raised, so there is sufficient equity to ensure attractive returns. Vikare already have interest from at least two developers so it is anticipated that a sale should be forthcoming in the near future.
What return can be expected for my investment?
The following gives an example of the return that can be expected from this investment. The minimum investment is £25,000 with no maximum. Some SIPP and SSAS providers will allow this investment but please ensure that you check first.
The total equity held (after this £500,000) will be €2,500,000 with the site value climbing all the time as a
consequence the design and planning we are doing.
Knight Frank is suggesting a value of between €5,500,000 and €6,000,000 for the site with the permissions
and designs we have in place once the WATG and YOO teams have completed the next phase of work.
This figure could be considerably higher due to the YOO contracts being in place, but as a sensible
contingency I have made no allowance for this increase in the figures.
Investors receive the first 10% p/a as a priority return and then 75% of the profit thereafter.
In rough terms the site could sell for between €5,000,000 and €5,500,000 (after costs) given the valuation
and the Yoo factor and this would result in a profit of approximately €2,500,000 – €3,000,000.
Taking the mid point the profits of €2,750,000 would be distributed as follows ( these are approximations as
accurate figures would depend on timings of various investments previously):
• €600,000 priority return for investors over the 3 year life of fund
• €1,612,500 Investors 75% Share
• €537,500 Vikare Profit 25% Share
This works out at approximately 83% return to investors over the course of the Fund.
An example of a €250,000 investment now may result in a high annual return of circa 83% due to the Fund
being near the end of its cycle.
This could mean a €457,500 return including capital and a profit of €227,500 in the next 12 months.
For more information please use the following for reference and refer to the presentation attached.