Off-Plan Fund Limited (The)
05 March 2007
For Immediate Release 5 March 2007
The Off-plan Fund Limited
Valuation Announcement & Update
The Board of The Off-plan Fund Limited (the 'Fund'), which specialises in
providing forward finance to UK housebuilders, is pleased to announce the Fund's
quarterly valuations for the periods ending 30 September 2006 and 31 December
2006.
Highlights
•Sales at Liverpool site progressing well - 25 sales achieved at a 134%
ROI
•Increase in NAV by 1.7p per share between 30 September and 31 December
2006
•Decision to rescind contracts at Nottingham site
•Strong pipeline of future investments
Period ending 30 September 2006:
•The unaudited net asset value of the Fund prepared under historical cost
convention as at that date was £7.75m (83.5p per share compared with 84.6p
as at 30 June 2006)
•Using Red Book* valuations for the underlying properties, the estimated
net asset value of the Fund was £8.2m (88.1p per share compared with 95.1p
as at 30 June 2006 reflecting the effect of the rescission of the Nottingham
contracts mentioned below).
Period ending 31 December 2006:
•The net asset value of the Fund prepared under historical cost convention
as at that date was £7.9m (85.18p per share).
•Using Red Book* valuations for the underlying properties, the estimated
net asset value for the Fund was £8.15m (87.4p per share)
The Board expects to present the audited year end financial statements to
shareholders by the end of March.
Update on the investment at Oldham Place, Liverpool
Following the acquisition of all 51 units at the development in Oldham Place
announced last year, the Fund has been actively marketing the site during the
latter half of 2006. The Board is pleased to announce that as at 31 December
2006, 25 units had been exchanged (sales of £4m) and a further nine are under
offer.
As a result of these exchanged contracts the Fund has booked a profit of
£227,921 on the original investment of £169,607 - a return of 134%. The impact
on the NAV is an increase of circa 2p per share. The deposit paid on the entire
development was £332,489 thus, with the return of the deposit in respect of the
exchanged units and the profit realised of £227,921 (ie £397,528 in total), the
Fund is in profit overall and expects to increase the margin considerably on the
sale of the remaining units.
Several offers have been received on the remaining 17 units, however the Manager
believes better prices may be achieved as the development progresses.
Construction is due to commence in the next month with completion due in
December 2008.
Liverpool remains a strong candidate for further investment and the Manager has
identified further opportunities in the area.
Update on investment at Waterfront Plaza, Nottingham
Over the past nine months the Fund's advisers have been in discussions with the
developer regarding the progress of the site. Owing to a number of issues
relating to the development beyond its control, the Fund was prevented from
selling the relevant units and realising the returns originally envisaged.
Accordingly the Board has executed its right under the acquisition agreement to
rescind all 30 contracts rather than pay the completion proceeds of £4.1m plus
4% stamp duty.
While it is unfortunate that the Fund has been unable to realise the value
originally contained in the investment, the Board and Manager believe that other
opportunities currently available offer the prospect of better returns and that
the exit agreed is therefore the most beneficial to the Fund. Under the terms of
the rescission the Fund has had £200,000 returned, which it will reinvest in
forthcoming projects.
Investment Pipeline
Over the last 12 months the Manager has developed strong relationships with
developers, agents and lenders and a number of these contacts are now providing
the Fund with suitable investment opportunities in attractive locations, where
demand is likely to remain strong.The Manager is currently in advanced
negotiations with developers on four further sites in targeted locations with an
aggregate gross development value of £25m.
List of Contacts
Development Capital Management
Roger Hornett
Andy Gardiner
020 7399 4270
Numis Securities
Adam Shapton
Charles Farquhar
020 7776 1500
Buchanan Communications
Charles Ryland
Isabel Podda
020 7466 5000
* The nature of the Fund's investments mean that, under current accounting
standards, the discounts to market value achieved by the Fund, cannot be
recognised in the reported balance sheet. The Fund therefore obtains an
independent 'Red Book' valuation of the assets within the property portfolio in
order that shareholders can identify this additional value. The Red Book is the
Asset Valuation Practice and Guidance Notes of the Royal Institution of
Chartered Surveyors and is the industry standard method for valuing investment
properties. The valuations were prepared by independent surveyors as at 30
September 2006, the date of the last financial statements.
Notes to Editors:
•The Fund is managed by Development Capital Management (Jersey) Limited
•The Fund provides a form of mezzanine finance through the acquisition of
UK residential property, sold forward by developers as a means of securing
better debt finance. The Fund then looks to sell the properties prior to
completion. By utilising only the deposit and purchasing at a discount, the
investment becomes highly geared, as do the potential returns.
•Working with a number of developers, the Manager has been reviewing sites
at the earliest stages of development. This approach allows the Fund to act
as a strategic partner, building a relationship with the developer
throughout the construction and marketing process and also enabling the Fund
to make investments on terms that may otherwise not have been achieved.
This information is provided by RNS
The company news service from the London Stock Exchange
*A Private Investor is a recipient of the information who meets all of the conditions set out below, the recipient:
Obtains access to the information in a personal capacity;
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Is not currently registered or qualified as a professional securities trader or investment adviser with any national or state exchange, regulatory authority, professional association or recognised professional body;
Does not currently act in any capacity as an investment adviser, whether or not they have at some time been qualified to do so;
Uses the information solely in relation to the management of their personal funds and not as a trader to the public or for the investment of corporate funds;
Does not distribute, republish or otherwise provide any information or derived works to any third party in any manner or use or process information or derived works for any commercial purposes.
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