Blackstand Ltd (the “Borrower”)
16 units at St. Marys Court, Dunboyne, Co. Meath (the “Property”)
A first collateral charge over the Property with a value of €1,960,000 and all works secured on the Property (the “Secured Property”)
A first charge over the shares in the borrower company.
Total Asset Value
Site Value: €1,960,000
7% per annum and rolled up for 12 months
Acquisition of the Property
LTV (Loan To Value)
12 months (3 months minimum)
Sale to an Approved Housing Body
This is a development loan to the Borrower. The Borrower is a developer with an experience in similar projects successfully in the region.
The loan is for the acquisition of the Property consisting of 16 units that the Borrower has pre-agreed to sell to an Approved Housing Body, Co-Operative Housing Ireland (the “AHB”). The Borrower will fund the refurbishment costs from its own equity.
The Property consists of 16 units that are partially completed with the original construction having commenced in circa 2004 consisting of 14 residential units and 2 retail units. The Borrower will fully complete the 16 units to be certified as compliant with current planning and building regulations. Improved construction practices can be engaged to bring the energy rating up to a B3 energy rating.
The Borrower will convert the two-ground floor commercial units into apartments under the Planning and Development (Amendment) (No. 2) Regulations 2018 (S.I. No. 30 of 2018) (the “Regulation”). The Regulation was introduced to exempt the change of use and related works of vacant commercial premises for residential purposes. This includes the conversion of vacant commercial properties in urban areas to residential accommodation without having to gain planning permission.
In August 2020, the AHB issued a letter of intent to the Borrower to purchase the completed Property for €4,045,000 inclusive of VAT. Thus, the Borrower will exit by selling the Property to the AHP in a pre-agreed sale.
The Property is currently valued at €1,960,000 by a qualified valuer in the February 2020 and the development loan sought is for €750,000 or 38% of the valuation.
The proposed bridging loan has a maximum term of 12 months and a minimum interest period of 3 months. This means that lenders will receive at least 3 months’ worth of interest payment even if the Property sells and the loan is repaid before the expiry of the 12-month term.
The loan carries an interest rate of 7% per annum.
The loan is secured by a charge over the Secured Property and by a charge over the shares in the Borrower company. This effectively gives the lenders the right to sell the Secured Property if the loan is not repaid at the end of the loan period.
The loan will be rolled up and paid in full upon the end of the Term.
Property Bridges has compiled this report on behalf of our lenders and have taken reasonable care to ensure the information provided is authentic and accurate. Please be aware that returns are not guaranteed, and your capital is at risk. Please also note that the term is not certain and may be extended under certain circumstances. Investors should seek their own advice before investing.
The Borrower is a developer with experience in similar projects successfully in the region.
The principal security for this loan is a charge over the Secured Property and by a charge over the shares in the Borrower company.
The subject Property comprises a mixed-use development with two shop units at the entrance and fourteen residential above and to the rear comprising one and two-bedroom apartments and three-bed terraced houses. The development is divided into four blocks as follows:
Shop Unit 1 & 2 – Ground Floor
Apartment 1 & 2 – First Floor
Apartment 3 & 5 – Ground Floor
Apartment 4 & 6 – First Floor
Apartment 7 & 9 – Ground Floor
Apartment 8 & 10 – First Floor
The blocks were constructed to varying degrees of completion from shell to fully complete with construction having commenced in circa 2004.
The Borrower has indicated total costs of €847,500 to fully complete the development which will be funded using their own equity. The works to be completed including the following:
- Floor slabs on the ground floors of all units to be removed and replaced;
- Existing plumbing and electrics to be stripped out and all units to be re-plumbed and re-wired;
- The above works will require that extensive building works be completed with the removal of part of the exterior walls required to allow access for machinery to remove the floor slabs and thereafter rebuilding the walls;
- All work to be certified in respect of building and planning regulations;
- Complete all external hard and soft landscaping; and
- Converting the two-ground floor commercial units into apartments under the Regulation.
Notwithstanding that the Property has not been completed since construction commenced in circa 2004, the valuers did not note any major detrimental factors with the repair and condition of the Property. Our quantity surveyors will review the present state of the Property and the works being done on them.
We detail below a guide to comparable sales of one- and two-bedroom apartments within Dunboyne and the surrounding area which we deem most comparable to the subject. Sale prices range from €169,000 to €255,000 and €245.61 per sq. ft. to €368 per sq. ft. Please note that comparable properties are of less significance in this offering as the exit has been pre-agreed with an Approved Housing Body before any development work commences, hence greatly reducing the overall risk.
23 Hamilton Hall, Dunboyne, Co. Meath
- Sold Q4 2018 for €250,000 / €363.37 per sq. ft.
- The property comprises of a ground floor own door 1-bedroom apartment extending to approximately 64 sq. m. (688 sq. ft.) situated 850 m south of the Property.
- The property offers very spacious living accommodation with a large living room/dining room and two well-proportioned bedrooms.
- We consider the property to be superior relative to the Property’s one-bedroom offering.
92 The Court, Dunboyne Castle, Dunboyne, Co. Meath
- Sale Agreed Q3 2019 for €175,000 / €353.54 per sq. ft.
- The property comprises a one-bedroom first-floor apartment situated within a modern development to the south of the Property.
- The property offers well- proportioned living accommodation which extends to approximately 45.98 sq. m. (495 sq. ft.) and has been maintained to a good standard throughout.
- We consider the Property’s one bed offering to be superior in the configuration as they will comprise ground floor own door apartment units which would appeal to potential purchasers of the market. However, the comparable property is considerably larger and as such we would expect the subject to achieve a lower price.
68 The Court, Dunboyne Castle, Dunboyne, Co. Meath
- Sale Agreed Q3 2019 for €169,000 / €344.20 per sq. ft.
- The property comprises a one-bedroom first-floor apartment extending to approximately 45.63 sq. m. (491 sq. ft.)
- The property is in very good condition throughout and offers spacious living accommodation.
- The property is superior in size relative to the Property albeit we consider this property to be superior in position to St. Mary’s Court, Dunboyne, Co. Meath.
Apartment, Summerseat Estate, Clonee, Co, Meath
- Sale Agreed Q2 2019 for €210,0000 / €368 per sq. ft.
- The property comprises a one-bedroom apartment extending to approximately 52.95 sq. m. (570 sq. ft.).
- We consider the property to be very comparable to the Property as it comprises a new build apartment situated within the established Summerseat Estate.
- We consider this property to be far superior in both its size and condition and we would expect the Property to achieve a lower price.
Dunboyne is situated approximately 18 km northwest of Dublin city center and is an important strategic location within 8 km of the M50 which provides access to primary routes leading to the North and South of the country. In light of its proximity to the Co. Dublin border and good public transport and road connections with Dublin City Centre, Dunboyne is well located for commuting to Dublin City Centre. The Property benefits from its closeness to Dunboyne Railway Station, being within approximately 20 minutes walking distance from the station and the Property is conveniently situated a short distance north of Dunboyne village which provides local shopping and leisure facilities.
The Property is located within an approximate five-minute drive of the M3 Motorway which provides access southbound to the N3 and subsequently Junction 6 Blanchardstown of the M50 Motorway. Junction 6 of the M50 motorway can be reached in approximately 15 minutes from the Property. Northbound the M3 provides access to the northwest of the country.
Planning will be examined as part of our normal legal due diligence, but the Residential Property is currently used for residential purposes – and we do not expect to encounter any issues around planning.
Term and exit
It is proposed to have a term of 12 months on this facility.
There is a built-in 3-month minimum term therefore even if the Property were to be completed immediately and transfer to the Approved Housing Body in less than a 3-month timeframe, all lenders will earn a return of 1.75% on their short-term investment.
Regarding the exit, the Borrower will sell the Property to an Approved Housing Body in a pre-agreed contract for sale.
The Secured Property is valued at €1,960,000 by a qualified valuer in the February 2020 and the development loan sought is for €750,000 or 38% of the valuation.
This is a development facility secured against a property. The following factors make this a strong investment;
- A pre-agreed exit with the Borrower selling the Property to the AHB in a pre-agreed contract for sale, hence negating the exit risk to effectively negligible.
- The investment is for 12 months but has a minimum term of 3 months.
- The property is in an area that in demand from locals and also has great connectivity and is 15 minutes away from Junction 6 Blanchardstown of the M50 Motorway.
- The Borrower is a developer with experience in similar projects successfully in the region.
- Our loan-to-value (LTV) rate of only 38% provides significant comfort even in the event the Property did not achieve its full asking price of €1,960,000.
- Strong security.