Investors paid 115.00p per share in the New Listing for this property, and it became available on the Resale market November 12th 2015.
A rare opportunity in central London, Zone 1 - the remaining four flats in Tower Mint Apartments are being offered with gearing; amplifying future returns. These factors, combined with a very high dividend yield for central London, make for an exceptional investment case:
- The investment comprises 4 flats in Tower Mint Apartments, a central London building, and is geared at 50% loan-to-value (LTV) of the purchase price. Gearing gives enhanced exposure to property price movements, and the potential for amplified returns; though investors must note amplified negative returns if prices fall.
- The flats are exceptionally well located, just 300m from Tower Bridge and 700m from the iconic ‘Gherkin’ building of London’s financial district. Stations that are within 850m of the building connect the area to the London Underground, Docklands Light Railway and train networks.
- The gross rental yield and dividend yield for the flats are unusually high for prime central London. This is partly due to the purchase price secured, and partly because we have secured a contract with a ‘serviced apartment’ operator, which eliminates voids and reduces costs.
- Our exit strategy is to sell the units individually rather than as a single investment, thereby realising the discount that we have secured from buying in bulk.
You can read more on the investment case here.
Property Partner does not provide advice and nothing in this Overview should be construed as investment or tax advice. The information which appears in this Overview is for general information purposes only and does not constitute specific advice.
The mortgage is being provided by a major high street bank and has a five-year fixed interest rate of 3.99%. Please refer to our blog post on geared property for further detail.
This property was acquired from the same developer that built the block in 2010, and we have purchased all seven flats in the block and the freehold interest. The Chartered Surveyor’s report identifies no material issues. We have made a provision of £5,000 for tests that are required, for any remedial works that the testing reveals, and for minor, sundry items listed in the surveyor’s report. There is also a provision of £4,800 for furnishings.
The properties are immediately income generating. Since acquiring the building we have secured a 'serviced apartment' operator to lease all the flats in the block, starting August 19th 2015. The operator has contracted to pay the rent on the entire building for 27 months, and we expect to be able to renew this contract, or a similar form, immediately thereafter. This arrangement eliminates ‘void periods’ and also management burden, allowing us to reduce our letting and management fee to just 6% (+VAT) of rental income.
After accounting for the service charge for the common parts, maintenance and insurance of the building, this equates to a Gross Rental Yield of 3.98% and a forecast Dividend Yield of 2.16% (fully accounting for and after: mortgage interest payments, purchase costs, furnishings, remedial cosmetic works, forecast maintenance, annual voids, corporate taxation and all fees). From April 2016 UK taxpayers are entitled to a £5,000 annual dividend allowance. See our FAQs here for more information.
For prudence, we haven’t included any growth in rental values in our forecasts - any growth in rent (on contract renewal) would be incremental to our forecasts.
This transaction was approved by our RICS qualified Director of Property.
Flat 1 is a one-bedroom flat on the ground floor, with an open-plan kitchen and reception room.
Flats 5 and 6 are identical two-bedroom flats, one of them on the second floor and the other on the third floor. Both have an open-plan kitchen and living room, a family bathroom and an en-suite bathroom.
Flat 7 is a duplex apartment over the third and fourth floors. The third floor contains an open-plan kitchen and living room and a shower room. The fourth floor contains three bedrooms, a bathroom, a separate en-suite bathroom for the master bedroom and a terrace.
- Share Valuation
- House Price Index
- Rental Income Breakdown
- Latest Valuation
- Latest Share Valuation
- Latest Property Value
- Amortised Purchase Costs
- - £1,075,650
- Deferred Tax
- - £41,568
- Latest Valuation
Note: The estimates provided do not constitute valuation advice; it remains your responsibility to determine valuation.
The HPI is an official statistic that captures changes in the value of residential properties across England and Wales. It is published by the Land Registry, which is a UK government organisation.
Note: Past performance is not a reliable indicator of future results.
Residential property investment is a total returns product. This information is the income component only. Increasing capital values have historically driven most of the return.
- Gross Rent per year (E)
- Service Charges
- - £0
- Gross Rental Revenue
- = £98,800
- Gross Rental Yield
- - £67,174
- Annual Interest Payment
- Letting and Management
- Property Insurance
- Maintenance Allowance
- Corporation Tax
- Dividends per year
- = £31,626
- Dividend Yield
Note: UK taxpayers are currently entitled to a £5,000 annual dividend allowance. This means that the total income related tax you pay is no greater than if you were to own the property directly. Gross rent and dividends may be lower than estimated. Tax treatment depends on individual circumstances and may be subject to change in future. See FAQs for more information on taxation. The Dividend Yield assumes an investment at the Latest Valuation.
Flats 1, 5-7 Tower Mint Apartments, Tower Hill, London, London, E1 8JX,