Cordea Savills is launching Serviced Land No.2, an investment opportunity for private investors, institutions, SIPPs, SSAS and charities focusing on obtaining attractive returns by acquiring and improving the value of land for housing development.
Serviced Land No.2 follows on from Cordea Savills' first Serviced Land opportunity, which in May 2006 completed its investment programme one year ahead of schedule. Launched at the beginning of 2006, Serviced Land No.1 LP has acquired three assets with a combined cost of a £11.9 million, which are already demonstrating considerable upside potential. For example, the first asset of 7.7 acres of land in West Costessey, Norfolk, was acquired for £7.62 million. A developer has offered to purchase the site for £9.24 million, an increase of approximately 20% on the purchase price, and is in the advanced stages of contract negotiations. One of the other sites, purchased for £1.1 million, has been identified by the relevant local authority in its draft development plan as a large scale housing site.
Serviced Land No. 2 has been developed specifically to meet the requirements of investors who have an appetite for opportunistic-style investing and will target a return of +15% p.a. over five years. It is seeking to raise in the region of £50 million and third party debt will be utilised to increase returns to investors. The level of debt is not anticipated to exceed 50% of the cost of the portfolio.
The investment strategy follows that of the Serviced Land No. 1 LP, namely to maximise returns through the 'enablement' of land, based on obtaining or refining planning consents and parcelling land and selling it as serviced sites to developers.
Steve Taylor, Director at Cordea Savills comments, "Serviced Land No.1 was aimed primarily at private investors. Following its early success, we have received a high level of interest from institutions keen to take advantage of the dynamics of the land sector. Market conditions are ideal for investing in land: the under-supply of housing means that the value of land remains high, while there is a substantial difference in price between land with and without planning consent. The stability of the housing market adds to the strength of the land market."
Serviced Land No. 2 is structured as an English Limited Partnership with a unit trust feeder fund for exempt investors, such as SIPPs and SSAS. The minimum investment will be £25,000 for private investors and £250,000 for institutions. The closing date for applications is 16 December 2006.
The fund manager of Serviced Land No. 2 is Cordea Savills, while the asset manager is Cofton Limited, a company that specialises in the regeneration and delivery of land to the house-building industry.
Source: Cordea Savills