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Macro Location Analysis
EvoEstate Risk rating is of an informative nature only & can not be considered investment advice.
Loan To value
We are now raising €98,400 related to the first claim we have received from the Borrower for the renovations that they are carrying out to the property.
Our QS has signed off on this claim, saying that it is on order,
The QS also confirmed that all works are on schedule and that costs that have been incurred, agree with the original budget that we signed off on when we originally recommended this deal to Lenders.
As advised in our original credit paper the Borrower will be selling the completed property to an Approved Housing Body. At this point the price has been agreed and Contracts are expected to be completed shortly.
Cahergal Real Estate Developments (the “Borrower”)
504 North Circular Road, Dublin (the “Property”)
A first collateral charge over the Property with a value of €450,000.
A first charge over the shares in the borrower company.
Acquisition Loan €315,000
Development Loan €395,000
Net Development Value
7% per annum (paid on completion)
Acquisition & Development Loan
LTNDV (Loan To Net Development Value)
27 months (6 months minimum)
An acquisition facility of €315,000 will be advanced to the Borrower to assist them in the purchase of the Property for €450,000. The Borrower, will then drawdown a development facility of €395,000 in tranches to allow it completely renovate the Property and convert the current 7 units, into 6 studio apartments. Currently, the Property is in a dilapidated state of repair.
A valuer appointed by us, has valued the Property in its current condition at €450,000 and the renovated Property at a value €1,020,000 on the open market as of the 13th April 2021.
The Borrower is an SPV company which has been set up by a number of property developers, who have experience of completing similar developments.
The proposed development loan has a maximum term of 30 months and a minimum interest period of 12 months. The lending facility will fund 70% of the acquisition costs and 90% of the build costs, which have been verified by our QS.
The Borrower intends to fully renovate the existing house and convert the current 7 units into 6 one bedroom apartments. The Borrower is currently in negotiations with a Housing Body to sell them the fully renovated Property. The Housing Body has the backing of Dublin City Council, as the city centre location of the Property is very convenient for social housing.
The loan carries an interest rate of 7.0% per annum.
The loan is secured by a charge over the Property, which is a mid-terrace, two storey over basement level period building, which is currently subdivided into 7 self-contained residential units (Pre-63) and by a charge over the shares in the Borrower company.
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 standalone subsidiary of Dalcassian Construction Limited. They concentrate on redeveloping large houses in inner city Dublin and Cork, with a view to putting in place residential units which meet all housing regulations and can be sold to housing bodies as social housing. The main principles behind the Borrower are quantity surveyors, with their own construction consultancy firm and a building company. The other principle runs his own accountancy business. The principles have extensive experience of renovating similar properties in Dublin city such as 6 Pembroke St, which was converted into 12 individual units. The following pictures of the finished units in Pembroke St will give you an example of what is proposed for the Property.
Due to the “in house” expertise of the Borrower, they will be fulfilling the role as QS for the project, and their construction company will carry out the works.
We have appointed our own independent QS. They have carried out a detailed review of the building project, looking at areas such as planning, building regulations and the cost schedule. They have confirmed that “the costs as prepared by the Developer are satisfactory to undertake the works for the scheme as proposed”
The Property is on Dublin City Council’s list of protected structures. None of the proposed renovation works will be impacted by this.
The principal security for this loan is a charge over the Property and a charge over the shares in the Borrower’s company.
The Property, which is currently laid out as 7 studio apartments with a basement level and 2 upper floors, requires significant renovation. When the renovations are complete there will be 6 self-contained studio apartments in the Property.
As can be seen on the following map, the Property is located on North Circular Road, close to the junction with Fitzgibbon St. Nearby amenities include Croke Park, The Mater Hospital and Connolly Train Station.
When the renovation works are completed the Borrower plans to sell be the Property to a Housing Body, which they are currently in negotiations with. The proposed 6 unit structure of the Property lends itself to social housing.
Our Valuer has visited the Property and confirmed a value of €450,000 for the Property at present. They valued the fully renovated Property (6 units) at €1,020,000, when the works are complete, and commented “If the subject property were to be offered to the market for sale post completion of the proposed works, we believe there would be strong interest from both Private and Institutional Investors with a view of holding the subject property as an income producing investment”. The following are some of the comparable evidence they used for the valuation of the Property.
1 Hollybank Road, Drumcondra
The property comprises 7 self-contained units, which have been newly refurbished. A similar Pre-63 investment property situated in close proximity to the Property
544 North Circular Road
A residential property split in 6 units. With the units being in fair condition.
33 Nelson Street, Phibsboro
This property, had 8 units, and was renovated to a high standard at the time of sale.
Our legal and QS due diligence has confirmed that planning is not required for the proposed renovations. Currently there is a flat roof at the front of the house but if the Developer decides to change this to a pitched roof, they will have to get planning for this.
Term and exit
It is proposed to have a 30-month term on this facility.
There is a built-in 12-months minimum term, which means that should the Property be renovated and sold in less than 12 months, all lenders will earn the equivalent of 12 months interest.
Currently the Borrower is proposing to sell the Property, when renovated, to a Housing Body. Should this not proceed, the Property will be sold on the open market. This sale will see the loan being fully repaid.
This is an acquisition and development facility to fund the purchase and renovation of 504 North Circular Road.