FAILSWORTH COMPLETION REPORT –
A great finish for Phoenix Mill, Failsworth – 38% in 1 year
Phoenix mill was purchased in December 2017 at an agreed price of £1m. The total investor raise was £1.13m to cover acquisition costs and other professional fees along with the agreed purchase price.
The initial objective was to maximise the rental returns from the existing tenants and then to progress the site through the Brownfield planning process for affordable housing, as the UK team had already received offers from an interested developer.
After lengthy consultations with local agents, the sites’ tenants and other relevant parties it was unamously agreed by all investors in the SPV (Special Purpose Vehicle) to change direction and to seek to maximise the potential of the site as an existing business and then place onto the open market.
During the 12 month period of ownership, a professional management team was appointed to manage the site. All of the tenant leases were re-negotiated and the 10 units which were vacant at the time of purchase were let. In addition, all repairs and maintenance issues were resolved. The income generated at the time of purchase was £147,000 pa and at the time of the sale, this had been increased to £210,000 pa. (producing a yield of approximately 12% pa for the new owner).
Marketing of the site for sale began in the last quarter of 2017 with a plan to list the site at a property auction in December 2017 should a suitable buyer not be found. At the end of November 2017, prior to the auction, a buyer was secured and the sale completed with a sale price of £1.75m . The buyer is a private landlord with a portfolio of similar income producing assets.
This produced a fantastic result for our investors and highlighted the ability of the UK team to maximise the potential of our projects as well as showcasing the flexibility to change should the market dictate.
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