The East London Property Bond
About LMSL Group
LMSL Group has been developing and letting property in the Walthamstow and Barking area for over fifteen years. What started with the purchase of a single buy-to-let residence in 1998 has grown into a portfolio of over 160 properties with an estimated value of £55 million .
What is the offer?
LMSL Group is excited to offer investors the opportunity to participate in the fast-growing East London residential property market through investment in the East London Property Bond. The Bond will pay interest to Bondholders at a 10% annual rate (gross) and will distribute cash coupons on a monthly basis. The East London Property Bond is offered for a fixed five-year term and secured against one of LMSL Group’s properties, the Barking Magistrates Court residential development, valued in excess of £10 million and due to be completed in September 2015.
According to the Greater London Authority (GLA), there are not enough homes to accommodate the rising population in the capital, which is expected to reach 11 million by 2050 . Within the London Borough of Barking and Dagenham, housing prices have increased 19% year on year . The directors believe that LMSL Group is well positioned to capitalise on this increased demand through its local market knowledge, property development and management experience, and existing relationships within the community.
What sets LMSL Group apart?
Unlike some other property development companies, LMSL Group prefers to hold its properties, employing a strategy that pursues both capital value and yield. For any property in its portfolio, LMSL Group targets an equity increase of 30% on “day one” and a return of 10% on debt over time. LMSL Group prioritises reinvestment in property acquisition, upgrades and modernisation over retaining significant cash-on-hand, allowing LMSL Group to continually meet its capital growth and rental yield objectives. This strategy has served the directors well through the boom years of the 1990s as well as the recession that followed the 2008 financial crisis.
How will LMSL Group use the funds?
LMSL Group is seeking to raise a minimum of £9 million and up to a maximum of £10 million through the issue of the East London Property Bond. LMSL Group will use £4.5 million of the funds raised to refinance an existing bank loan; the remaining balance of the Bond principal will provide investment capital for planned developments in line with LMSL Group’s investment strategy.
What are the repayment terms?
LMSL Group will repay all East London Property Bonds at the fifth anniversary of their issue. LMSL Group may, at its option, redeem all or part of the East London Property Bonds, with interest, prior to maturity.