Flush Investments

Our private investor network gives clients an opportunity to profit from a wide range of Flush group property investments.

Investors can choose between and Exit Focus or a Next Generation structure.

Investment Overview

The Chrysalis Property Investment 3 year 6.25% Bonds are Asset Backed Bonds secured on an underlying portfolio * of UK residential property, property development and land that is actively managed by Chrysalis & our Development partner the Flush Group.

Investment Objective

To provide investors with a fixed distribution of 6.25% p.a. paid annually with prospect of additional capital appreciation (to discuss).

It is anticipated that the overall net return to investors will be circa 7% p.a. including the fixed distributions (need to confirm the % returns)

The underlying portfolio * consists of residential properties, residential developments and development land in the South East of England in private, affordable and social housing sector

Our Traditional Developments and Construction division specialise in high quality projects within the East & South East of England.

We focus our attention on projects that are too small for the PLC Developers (Persimmon Homes, etc) yet too large for small developers.

This approach enables us to secure highly lucrative profits with little competition from other developers.

All these developments are designed & build by our development partner the Flush Group.

Investment Strategy

Chrysalis/ Flush Group’s strategy is to identify, acquire and actively manage developments and tenanted portfolios of affordable and social housing within the UK. Working closely with local government, housing associations and private sector, Chrysalis / Flush Group is uniquely positioned to capitalise on the demand for high quality affordable and social housing and private real estate in the UK

Exit

The scheme(s) can be delivered in two phases and there is the potential for the following exits:

Institutional PRS (PRS), for example Grainger / Aberdeen land sale and development exit.

Buy to let Investors (BTL). “Bulk sale” of groups of units organised through investment clubs such as Knightnox or Connells.

Private Sales. The units could be sold in traditional manner. This could be done at the same time as BTL Investors above and it could also be supported by rolling any unsold units into private rental supported by BTL mortgage.

Risk

Whilst we do not envisage any other major factors which we would consider a risk to any investment, the company will be working within the property market and, as such, will be exposed to the usual development risks related to market conditions, rental or sales values, change in economics and absorption / saturation rates. Any end purchaser / onward sales agreements are also subject to formal contracts.

Demand for Affordable Housing

The UK is one of the most densely populated countries in the world with more than 63 million people recorded in the 2011 census. This equates to around 674 people per square mile. There is an urgent unfulfilled demand for new housing in the UK. This is especially so in the middle market and affordable sector. In the last decade the UK population has grown at an average rate of around 400,000 per year and according to official estimates will rise by almost 10 million over the next 25 years.

Chrysalis proactively works with housing associations and local communities in the development of its affordable housing projects, providing long and short term leases, not only providing sustainable rental yields to its investors but an ethical solution to the current housing shortage.

UK Housing Market Outlook

Key Points: (research via PWC)

  • House prices in the UK were not impacted by the UK’s decision to leave the EU as quickly as expected, though price growth stalled in the second half of 2016 and is now showing signs of a slowdown.
  • We (PWC) anticipate that the rest of 2017 will see the slowdown in the housing market continue, yielding annual house price growth of around 3.7% down from 7% in 2016. In our main scenario, house price inflation will pick up slightly again in later years averaging around 4% until 2025
  • Elsewhere in the UK, the East and Southern regions of England will continue to grow above the UK average, but Northern Ireland and the North East will continue to lag behind
  • There is a huge disparity in how sub-regional housing markets have performed since the recession. Whilst the average house price across the UK has grown by 17% since mid-2007, over a quarter of all local authorities are still “under water”
  • House price prospects – In our main scenario we assume that real earnings growth will remain close to zero in 2017 and 2018, down slightly on the 2016 figure as inflation continues to rise. We project that real earnings growth will recover slightly after 2019 and reach about 1.5% per annum by 2021. Informed by the Council of Mortgage Lenders forecast we also expect credit conditions to remain fairly neutral and mortgage lending to grow modestly over the next four years
  • From 2014-2017, we see outer boroughs growing at a markedly faster rate than inner boroughs. In particular, boroughs in North East of London, such as Barking & Dagenham & Havering, have seen the highest rise in house prices over the past two years at 31% (research via PWC)
  • Both Basildon and Rochford recorded 11% annual growth in the first four months of 2017. Overall Essex appears to be the key hotspot, probably because house prices there have been lower than those in commuter towns West of London (research via PWC)
  • First-time buyers hit 10 year high as buy-to-let property sales fade (The Guardian)

Research/Source Information

  • PWC
  • The Guardian
  • JLL