Property investment platform Shojin has returned £6 million to investors after refinancing an existing loan facility for a large development in Leicester. The FCA-regulated online real estate investment platform paid back £3.1 million in capital and £2.9 million in interest following a restructuring and refinancing of the scheme. It represents a 19.2% annualised return for investors.
Jatin Ondhia, CEO of Shojin, said: “This is yet another example of a successful exit and strong returns offered to our investors and demonstrates how we work closely with reputable middle-market developers to help them achieve their desired plans. Importantly, Shojin is helping middle-market developers scale and deliver essential UK housing while also providing a rapidly growing global investor base with a choice of excellent opportunities, providing outsized returns, with relatively low minimum investment amounts.”
The new 12-month bridging loan facility has enabled the developer to deliver the scheme in two parts and optimise the cost of construction. Building work has started on one part, which is being refinanced separately, while the other part is postponed for 12 months and placed on a bridge loan. This provides the developer with sufficient time to value engineer the second part of the scheme and commence construction in 2023.
Given the rising cost of construction and sheer size of the development, the developer determined it would be better to build the remaining site in three parts with regional contractors rather than use a tier 1 national contractor, saving almost £8 million in the process. The developer intends to replace the bridge loan with development funding next year, which Shojin may participate in if required.
The development in the second part of the scheme is Purpose Built Student Accommodation (PBSA) for 271 units, 567 beds, 10 communal areas, 48 car parking spaces, and a ground-floor retail unit.
Leicester is home to two major universities – the University of Leicester (15-minute walk) and De Montfort University (7-mins walk). According to Homes England Student Accommodation data, there were 38,520 full-time students studying in Leicester, with 14,635 students studying at the University of Leicester and 23,895 at De Montfort University.
The returns to investors on the Leicester development come shortly after Shojin returned £2 million to investors from a bridge loan provided to acquire a 7-acre site in Greater London.