Viability and yield underwriting 02/13
With so many other investment opportunities in the news coming forward at present e.g. UK wide PRS solutions, infrastructure investment (NAPF), sale & leasebacks (recent Genesis deal) and REIT solutions in the pipeline, why would investors look towards a C4H-PT investment?
The government has contributed circa £80+ bn over the last 20 years to assist housing delivery simply because viability does not work. We believe our combination of proven viability and yield surety are key to attracting investment.
Our without subsidy solution delivers additional new homes by amalgamating the two traditional investments used to deliver new communities. Our related fund C4H-PT provides an RP bond equivalent investment to facilitate the affordable homes delivery and then invests in the private homes for long term sales and rental at open market value, as the homes are built. This creates two income streams for C4H-PT and Catalyst for Homes adds value to the private home purchase by allowing C4H-PT to retain and then re-cycle it’s developer profit, which is repaid for community investment when yields hit trigger levels. (see graph)
This solution resolves what we believe to be the two core issue’s not addressed in combination by any other solution to date – namely viability (by retention of our created profit) and yield protection (from minimum incomes via the RP bond). As a community interest company we feel this solution provides a unique investor focused opportunity, where circa 50% of the multi-location investment is inflation linked, circa 50% is secured by an RP bond equivalent and about 25% of the whole is consequentially available (subject to investor yields) for additional long term community investment and economic growth.
Its a win win situation, for pension funds where they have an authentic opportunity to generate unprecedented levels of local economic investment and growth. Achieved via a low risk underwritten return from built homes, whilst not having to sacrifice the possible 8-10%+ gross yield upside to achieve the social good.
The C4H-PT 2013 investment of £152M creates 675 new homes across three locations and £37.5M of additional Social Investment over 30 years (in addition to any S106 etc) This is circa 25% of the original investment and is invested in association with the RP and LA, supporting the very communities that the pension funds have themselves taken a long term interest.
We believe the Community Interest Company (CIC) recycling and consequential re-distribution of it’s profit, combined with long term PRS and RP bond incomes, provides a solution that addresses the attractiveness of residential investment in a manner that is as yet unmatched by others, and we would welcome your thoughts.
Please email: email@example.com
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