The Directors of Residential Property Trading Plc have today published an Information Memorandum comprising an offer for subscription inviting qualifying investors to participate in RPT, an investment company set up to produce returns for sophisticated UK investors through the acquisition and rapid disposal of selected UK residential property.
Key investment highlights are:
- Provides sophisticated private investors with the ability to invest in a company aimed at trading UK residential property rapidly and profitably
- Investment is pension scheme (SIPP) compliant
- A highly experienced Property Adviser: Move with US plc
- Income-producing: annual income of 8% paid every six months to investors (after an initial six month interest-free period)
- Short time horizon: defined, targeted exit at 36 - 42 months from investment close
- Targeted gross return to investors of 46% after 3 years
- Targeted gross IRR to investors of 13% pa over 3 years
- Low use of leverage (maximum 50%)
- Management performance fees only payable if the property trading generates profits for investors
- Exit performance bonus to management only payable if the Investors have received in excess of an aggregate gross of tax internal rate of return of 12% per annum on their investment.
The Directors intend to raise up to £8.25m from investors via the offer for subscription which is for up to 825,000 Ordinary Shares issued at £1.00 per Ordinary Share in RPT and for up to £7,425,000 of Loan Notes (subscribed for together in the fixed ratio of one Ordinary Share to every £9 of Loan Notes).
The offer is restricted to sophisticated investors and the minimum subscription per applicant is £50,000 (made up of £5,000 for Ordinary Shares and £45,000 for Loan Notes).
In addition, RPT has entered into an agreement with The Bank of London and The Middle East (‘BLME’) to provide finance of up to £7.5m which provides a maximum gearing of 50% of property value.
The offer is being marketed by LLP Services Ltd, which is authorised and regulated by the Financial Services Authority in the UK.
Approval has been obtained for the Ordinary Shares and Loan Notes to be listed on the Malta Stock Exchange (an HMRC “recognised exchange”), thereby facilitating investment by pension schemes. Subject to their particular circumstances, pension scheme investors should receive their entire return tax-free.
RPT has appointed Move with Us plc as Property Adviser to selectively acquire properties from house builders, lenders and other residential property portfolio owners.
RPT expects to buy and sell between 300 and 400 properties per year. Robin King, the founder of Move with Us and a Director of RPT, has a successful track record in the active trading of UK residential property and has been instrumental in the growth of Move with US plc.
In the year ended 2010 Move with Us achieved sales of £41.6 million with profits of £3.7 million and currently employs more than 300 people.
Commenting on the launch today, David Megginson, a Director of RPT said:
“RPT gives eligible investors access to a very profitable niche within the UK property market which is not normally open to individuals; investors will get to participate in an investment company which is capable of producing sustained profit irrespective of the property market sentiment be it good or bad.
“In addition our Property Adviser, Move with Us plc, is highly experienced and has been trading property for many years and has in place relationships with over 3,500 estate agents throughout the UK.
"This provides unmatched market intelligence and routes to market. This intelligence coupled with the financial resources and expertise of RPT will help us deliver what we believe will be very attractive returns for investors.”
