an exclusive high yielding new build student property ... · typical mortgage repayment per annum...

AN EXCLUSIVE HIGHYIELDING NEW BUILDSTUDENT PROPERTY INVESTMENT OPPORTUNITYbrought to you by the Alliance Group.

A great addition to any property portfolio in the increasinglypopular Student Accommodation investment sector.

� AN EXCLUSIVE HIGH YIELDING NEW BUILD STUDENT PROPERTY INVESTMENT OPPORTUNITY –brought to you by the Alliance Group. A great addition to any property portfolio in the increasingly popular Student Accommodation investment sector.

� YIELDS OF 10% assured in Year 1 – no voids

� Room prices from ONLY £40,000* requiring ONLY £20,000 deposit.

� 50% FINANCE AVAILABLE for all investors

� HIGH SPEC with excellent living space and facilities

� EXCELLENT location

� LOW MAINTENANCE COSTS and fully managed

� HIGH DEMAND for purpose built student accommodation in Huddersfield

� University of Huddersfield is one of the FASTEST GROWING in the UK.

� FULLY FURNISHED

� 199 YEAR LEASEHOLD TITLE

� Investors will have PEACE OF MIND that their deposit is INSURED for the construction period

� HANDS OFF INVESTMENT with management company appointed

� EASY PAYMENT TERMS

* Assumes purchase of townhouse with freehold.

STUDENT ACCOMMODATION HUDDERSFIELD

AN EXCLUSIVE HIGH YIELDING NEW BUILD STUDENTPROPERTY INVESTMENTOPPORTUNITY


INVESTMENTSUMMARY

KNIGHT FRANKSVIEW ON STUDENTACCOMMODATION

The underlying market

fundamentals are positive, with

supply restricted and strong

demand underpinning rental

growth. Given the lack of

finance currently available for

development and the

constrained pipeline, rents are

likely to continue to rise for the

foreseeable future. There is

strong demand for high quality,

income producing assets and it

is anticipated this will continue

with increased appetite from

investors for direct let stock.

Source: Knight Frank Student

Research Report

A STABLE AND HIGHYIELDINGINVESTMENT

There is a widespread

difference of opinion regarding

what will happen in the

residential and commercial

property market in the UK right

now. One thing few experts

disagree on is the potential for

both capital growth and surety

of high rentals that comes with

well located student

accommodation in key cities

with prestigious universities.

Over the past 6 years rents in

this sector have increased at

5% per year, in contrast to 0.6%

for the commercial market as a

whole and occupancy rates for

student accommodation

currently sit between 97%-

100%. Compared to residential

tenants who often sign for 6

months contracts, students are

often required to rent for a full

year.

A PASSIVE INCOMEAND TURNKEYINVESTMENT

Most property is rarely as

passive or hands free as we

would like. However, by

working with a very

experienced and established

management company that

specializes in the student

accommodation market, this

investment provides you with a

truly hands free investment

where you can sit back andreceive your regular monthly

income.

Whilst it is true there is a serious lack of good quality student accommodation, this shortage is even more

compounded for luxury student accommodation which Alliance are building in Huddersfield. Not only do

these types of accommodation command higher prices but, most importantly they are the ones which are

rented first and provide the highest occupancy rates.

HOUSE 1: 6 bed En-suite




HOUSE 5: 6 bed (2 En-suite and 4 with double shared shower rooms)

WHAT IS INCLUDED IN EACH ROOM

1x Bed

1x Desk/workstation

1x Study chair

1x Curtains/blinds

1x Wardrobes

1x Electric data/phone sockets

1x Duvet/pillow/mattress

Hi speed WIFI

COMMUNAL KITCHEN/LOUNGE AREA

Flat screen TV

Sofa/chairs

Coffee

Cooker

Microwave

Washing machine

Dishwasher

Fridge/freezer


THE DEVELOPMENT

5 new build purpose

built student

townhouses.

28 units in total.

Completion for start of

2013 academic year.

Purchased on 199 year

leashold.

All houses have a

lounge, kitchen and

dining area. Parking and

cycle storage.

NORTH WEST FACING ElEVATION

SOUTH EAST FACING ElEVATION

GROUND FlOOR

PlAN

SECOND FlOOR

PlAN

SOUTH WEST FACING ElEVATION

FIRST FlOOR

PlAN

NORTH EAST FACING ElEVATION

THE DEVELOPMENT CONTINUED


Students value the location of

their accommodation almost as

much as the quality of it, and

this is something Alliance has

taken into account selecting this

prime location. This ensures a

very high occupancy and

demand to rent this student

accommodation.

The site is located in lockwood,

which is a residential area

popular with young

professionals and students.

Situated 1 mile from the town

centre of Huddersfield and the

main campus of the University

and close to local amenities. It is

a 15 minute walk to the

University or 5 minutes by bus.

local amenities include Tesco

Express, Fitness First,

Huddersfield Rugby Club,

Restaurants and Bars.

Huddersfield is located in the

heart of Yorkshire on the M62

with quick access to leeds and

Manchester and has excellent

rail links to liverpool, Sheffield

and York. One of the largest

towns in UK on the edge of the

Peak District an area of

outstanding natural beauty.

A town centre campus with

sporting, cultural and social

amenities you would expect

from a major regional centre.


THE LOCATION

Huddersfield is located in theheart of Yorkshire with quickaccess to Leeds, Manchester,Liverpool, Sheffield and York.

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HUDDERSFIELD

SITE PLAN

THE DEVELOPMENT

ESTABLISHED IN 1825 as HuddersfieldScientific and Mechanic Institute. TheUniversity of Huddersfield is one of the fastest growing inthe UK with a student population of over 24,000 from 130 different countries. RECENTLY VOTEDNUMBER 1 IN THE WORLD by overseas students by (IBS) rating learning and living experiences.

Ranked 6th in England for GRADUATE EMPLOYMENT HIGHER THAN OXFORD ANDCAMBRIDGE (HESA). 94.4% of students areemployed of in further education within 6 monthsafter graduating. RECENTLY SIGNED ANAGREEMENT WITH THE PRINCES TRUST todevelop its links with the University’s Business Mine- which provides advice, mentoring andfinancial help to enterprising students and the NEW £11.5 MILLION ENTERPRISE ANDINNOVATION CENTRE.

Majority of English Universities have increased feesto the maximum of £9,000 pa, where the University ofHuddersfield raised the fees to £7950 pa MAKINGIT VERY COMPETITIVE. This on top of its long andproud tradition of delivering first class education andemployment prospects has resulted in recordnumber of applicants for the 2012 academic year.

THE UNIVERSITY OF HUDDERSFIELD ISRANKED 5 IN THE UK for the biggest increase inapplications for 2012 with demand rising by morethan 60 % compared with the previous 3 yearaverage (Savills Student Housing Spotlight).

THE MAIN QUEENSGATE CAMPUS HAS SEENOVER £90 MILLION INVESTMENT over the past10 years including a new £16 million Business Schooland a £21.5 million learning and leisure Centre tobe opened in 2014 to fully integrate with theremodelled library and Central Computing Facility.

THE SUCCESS OF THE UNIVERSITY IS CREATING A HIGH DEMAND FOR PURPOSEBUILT STUDENT ACCOMMODATION INHUDDERSFIELD.


University Campus OldhamwelcomesProfessor BRIAN COX prominent UKphysicist and BBCpresenter, back to his home town

THE UNIVERSITY


FINANCIALSOPTION 1 Purchase individual room(s) as a shareholder of the property with a 199 yearleasehold title.

Illustration of a single en-suite room based on market income projections

Purchase Price £49,995

50% Investor Cash Deposit £24,998

50% Mortgage Finance (20 year repayment) £24,998

Gross Rental Income + Yield £4,590 – 9.2% per annum

Management Fee 8% + vat £441 per annum

Net Yield on Purchase Price 8.3% per annum

Net Yield on Cash Deposited 16.6% per annum

Typical Mortgage Repayment per annum £1,980 (source lloyds TSB mortgage calculator)

(based on 20 year capital repayment interest at 5%)

Residual and cash positive income including £2,169

capital being repaid on mortgage each year

Projections show initial equity invested can be repaid in only 11.5 years (including making capital repayments each year)

OPTION 2 Purchase whole house and retain freehold10% DISCOUNT OFF INDIVIDUAL ROOM PRICES£49,995 reduced to only £45,000 per room - SAVING £29,970

Illustration of townhouse 1 (6 bed en-suite)

Per room

Purchase Price £270,000 £45,000

50% Investor Cash Deposit £135,000 £22,500

50% Mortgage Finance (20 years) £135,000 £22,500

Gross Rental Income + Yield £27,540 at 10.2% £4,590 AT 10.2%

Management fee 8% + vat £2,646 £441 per annum

Net Yield on Purchase Price 9.2% 9.2% per annum

Net Yield on Cash Deposited 18.4% 18.4% per annum

Typical Mortgage Repayment per annum £10,692 £1,782 (source lloyds TSB mortgage calculator)

(based on a 20 year capital repayment and interest of 5%)

Residual and cash positive income including

capital being repaid on mortgage each year £14,202 £2367

Projections show initial equity invested can be repaid in only 9.5 years (including making capital repayments each year)

* Please note these examples are for illustration purposes only.

The projections for income, occupancy and rates etc are not guaranteed.


RENTAL INCOMERental Returns in years 1-3 (assuming 3% annual increase)

Alliance have negotiated a competitive rate and service with a reputable management company.

It is anticipated each room will achieve in excess of £90 per week over 51 weeks. The following tables illustrate

projected rental returns and are based upon the price per room for the purchase of a townhouse.

Existing comparable student rental properties:

YEAR 1 £4,590 £90 PW 10.2%

YEAR 2 £4,743 £93 PW 10.5%

YEAR 3 £4,896 £96 PW 10.9%

RENTAL INCOME

RENTALAMOUNT

YIELD

Snow Island, Kingsmill Lane studio £90 Unite Students

Firth Point, 100 Firth Street HD1 studio £95 Unite Students

Aspley Hall, HD1 studio £97 Opal Students

Gransmere Road, HD1 5 bed apartment £85 Student

Victoria Road, HD1 5 bedroom flat £90

Victoria Road, HD1 6 bedroom flat £100

Water St, HD1 1 bed flat £87 Right Move

New North Road 5 bed semi £96 Right Move

Brook Street, Moldgreen 6 bed terraced £80 Right Move

Highfileds Developments studio flats (20) £115 Right Move

LOCATION PROPERTYTYPE

PRICE PW SOURCE


BUYINGPROCESSOPTIONS1. Purchase whole townhouse and retain freehold.

2. Purchase individual room(s), as a shareholder of the property with a leasehold title.

RESERVATIONSSTEP 1 – Complete reservation form and pay reservation deposit of £5,000.

STEP 2 – Introduction to buyers’ solicitors. Pay 50% of legal fee of £600 (inc VAT).

– Receive Sales & Purchase Contract and lease Contract.

EXCHANGEExchange will be within 21 days after reservation for 50% of purchase price.

Step 1 – Pay balance of exchange deposit £24,997.50 less £5,000 already paid - £19,997.50.

Applicable to single room purchases. Deposits will vary per room for townhouse purchases.

COMPLETIONAnticipated July/August 2013.

STEP 1 – Developer’s solicitor issues notice to complete.

STEP 2 – Pay balance of legal fees - £600

STEP 3 – Pay proportionate share of Stamp Duty (see below)

STEP 4 – Pre occupation checks by relevant council and architects.

STEP 5 – Draw down of finance available of 50% of purchase price.

Building ready for occupation.

STAMP DUTYStamp Duty will be levied at the prevailing rate.

House No.1 – 3% of purchase price House No.4 – 3% of purchase price



For individual room purchases as these will be done on a share basis Stamp Duty will be paid by room

purchasers on a proportionate basis of the freehold amount of Stamp Duty.E.g. On House No.1 where stamp duty at 3% is £8,100, each room buyer will pay a 1/6th share of this, £1,350.

ASSURANCE10% immediate income from day 1 of operation guaranteed for the first year

based on the purchase price, not the cash invested.

The guaranteed rental income will commence on the agreed legal completion

date and will be paid quarterly in arrears net of finance payments, tax and

other considerations.

* The above is for illustraion purposes only.

Individuals will receive up to date precise purchase costs and processes upon reservation.

1. What is the length of the lease on each room?The lease will be 199 years from the completion date of the property. This is considered a long-term lease.

2. Are the rooms furnished?These are luxurious student rooms and accordingly will be delivered with everything a student requires to start or continue studies.

3. How achievable are the rental yields?Similar student accommodation in Huddersfield is currently renting for similar prices, without factoring in a year’s worth of rental price increases which would mean values would be greater at completion in readiness for 2013 academic year.

4. What is meant by the first year rental is assured?This means that the developer will assure the payment of rental for the first year starting in September 2013, which gives investors absolute peace of mind.

5. Are my deposits insured?All investor deposits will be insured. Only when the purchasers solicitors have received details of the insurance cover in place will exchange deposits be released to the developer.

6. How do I know my property meets the criteria for student accommodation?There is already planning approval for the build of 6 new student houses with a total of 28 rooms. The development will also hold the relevant HMO license (House of Multiple Occupation) issued by the Government for communal living.

7. Who will manage the rentals?Will manage all the rental income on behalf of all the investors, working closely in conjunction with the Alliance GRP.

8. Do I have to take the mortgage or can I purchase with cash?This will be one of the only student accommodation investments where purchasers benefit from an exclusive 50% of the purchase price as a mortgage. This significantly reduces purchasers capital required and increases cash on cash returns, in addition to the provision of high passive income after the repayment of the mortgage. Purchasers who decide to buy a whole house on a freehold basis will have the option to purchase in cash or with the 50% mortgage. Purchasers of individual rooms will have to take the 50% mortgage.

9. What are the expected legal costs?legal costs are expected to be £1,000 plus VAT. 50% payable on reservation/exchange and 50% on completion. Details of our nominated purchasers solicitors are available upon request.

10.Will I be able to sell my room or townhouse?Yes both owners of whole freehold houses and individual room owners with a leasehold title will be free to sell after completion of the purchase.

It is worth noting that this is a high yielding investment particularly attractive due to the:

� High Yielding New Build Student Property located within 1 mile of Huddersfield University

� High Specification, Fully Furnished with excellent living space and facilities

� 50% lTV Finance available

� Fully Managed with low maintenance costs

� High demand for purpose build student accommodation in Huddersfield

11.Other costs?Closing costs will include legal fees as above, management set up fee (approx £150 per room + VAT), stamp duty as above, plus any finance arrangement fee. Owners will be responsible for utilities.


FAQs

With offices in london and Hong Kong,

the ALLIANCE GROUP has an

established and professional

management team, who have assisted

thousands of clients from around the

globe for more than 20 years.

Excellent results and achievements have

been accomplished with a focus on

diligence, the right investment

approach, and a great emphasis of

building relationships through

delivering results and service to our

clients.

ALLIANCE GROUP develops and

manages high quality, income producing

assets on behalf of all investors

LONDON OFFICE14 Duke StreetMayfairlondonUnited Kingdom

T +44 020 7409 3055E [email protected]

HONG KONG OFFICERm 1204, Kinwick Centre32 Hollywood RoadCentralHong Kong

T (852) 2242 8989E [email protected]

www.gp-alliance.com

THE ALLIANCE GROUP

AUTHORISED SEllING AGENT(S)

The information is made available to you for your personal use and must not be given, shared or communicated with any other

person except for your own professional advisors for the sole purpose of obtaining their professional advice.

We endeavour to provide up to date, accurate and complete information but make no guarantees or representations as to the

accuracy, reliability or completeness of the information contained herein including changes to taxation legislation etc.

Subject to contract.

The developer reserves the right to alter plans, designs and specifications that may be required and therefore descriptions of the

project, buildings, location or development particulars, specifications including artists impressions and images of the development

are given in good faith and believed to be correct, but they do not form part of any offer or solicitation and are intended only as a

general guide.

Further information will be contained within the legal pack provided by the solicitors and purchasers are advised to verify

information with the solicitors.

an exclusive high yielding new build student property ... · typical mortgage repayment per annum...

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