Shojin Property Partners has launched a new crowdfunding investment opportunity for a newly built student property block in Nottingham.
The block consists of 124 newly-constructed studios which are 100% let for the academic year of 2018/2019, with an experienced national student block manager overseeing the units.
The block was valued at £12.06 million in September 2018. There is a £6.4 million senior loan secured by a first charge against the property, which replaced the development loan. This will be a joint venture between Shojin and the developer, with funding and profits to be split equally.
In the development phase of the project, Shojin participated by providing funding to the developer. The total crowdfunding equity is £1.27 million from investors, with a minimum investment of £5,000.
Investors will be paid quarterly over the course of a three-year term and are targeted to earn an income return of 6.3% per annum on average (excluding expected capital growth). They are also expected to receive a return on invested capital (ROIC) of 48%, or 16% annually, which includes capital growth in the value of the asset.
The property will be held for three years and is expected to generate an average gross rent of just under £1 million per annum. There is also the predicted benefit from the growth in value of the property over the investment term. The anticipated exit for the investment is a sale to a third party.
Jatin Ondhia, chief executive officer of Shojin Property Partners, commented: “This student property development is a great crowdfunding opportunity and from as little as £5,000, people can invest in this scheme and hope to receive 16% per year, which in this market, is better than having your money in the bank earning 2% per annum, at best.”
The property is just a few minutes’ walk to Nottingham Trent University and close to the city centre’s shops, bars and restaurants. The studios, which are finished to a highquality, aim to provide students with comfortable and affordable accommodation.
According to UCAS, 84,000 applications were made to Nottingham’s higher education institutions in 2017. Further studies show there were only 13,600 purpose-built student beds available from the University of Nottingham and Nottingham Trent University.
Ondhia concluded: “There is a huge demand for purpose-built student accommodation for both universities in Nottingham and this new investment opportunity offers 100% occupancy for the current academic year, with excellent rental yields.”