Uk006- 80 Unit Development Site

Uk006
Launch details

Launched
June 2008

Issue Price
£9.91

Property Value
£6,200,000

Shares Issued
300,000

Equity Per Share
0.00033%

Key Points

4.4 Hectare Site
Detailed Planning Granted
£23,905,00.00 GDV
Planning for 80 Dwellings
Potential Increase in Density
Conservative Re-Sale Estimates
38 Miles From Edinburgh

Shares Available	sold out
Share Price	£10.00 Up 1%
Commission (2.5%)	£0.25
Total Share Price	£10.25
Property Value	£6,262,000 Up 1%
Equity Per Share	0.00033%

Total share price: £10.25

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Bid for SharesRegistered members can now bid for shares

Synopsis

Ftsie is pleased to be able to offer members the opportunity to invest in this 10.8 acre greenfield site in Newtown St Boswells, a small rural village approximately 2.5 miles south east of Melrose, in the Scottish Borders

The project is in two stages. Stage one is now being launched and relates to the site and the high potential for us to be able to increase the number and layout of the units. This together with a higher re-sale value for the units (comparables in the area indicate that this is already the case) should show investors a substantial profit on their investment within a 24 month period.

At present, the site has detailed planning consent for 80 two-story houses with eight house types ranging from 1,503 sq ft to 2.239 sq ft. (planning ref 04/01521/FUL). We are of the opinion that we can increase the housing on this site by 25% to 101 units. This together with a better designed scheme should result in us being able to re-sell the development site for a 25% profit. As this project has funding in place, this means that investors could see net returns of over 50%.

Following the outcome of our revised planning application, the site will be re-valued and either put on the market for re-sale or developed by ourselves. If it is decided to develop the site, investors in stage one will be offered the opportunity to either stay in the project, or to cash in their shares at the market price at that time. Investments of over £5,000.00 will pay a lower commission.

The Figures

Acquisition Costs	£6,324,000
Less Bank Finance	£3,735,00
Net Acquisition Equity	£2,589,000
Interest On Bank Loan (yr1)	£260,000
Planning/Consultancy	£60,000
Management Fees (1%)	£63,240
Total Equity Stage 1	£2,972,240

Valuation Principal

The development site has been valued by Savills at £6,200,000.00. The simple basis of the valuation, is the amount of houses to be built(141,808 sq ft) multiplied by projected sales of £165 per sq ft giving a gross development value of £23,398,000. From this a developers profit of 15% on costs is calculated giving a land value of £6,200,000.00.

Therefore an increase in either the density of housing on the site or the projected sales value will increase the value of the land. We are aiming to incease both these figures.

Potential Profit From An Increase In Density

The site at present has detailed planning for 80 units with a total floor area of 141,808 sq ft. It is the opinion of our advisors that the existing planning could be improved to create a better mix of properties. This re-design would fit the housing needs of the area much better than the proposed scheme. As the result of a successful planning application, the density would increase to 176,000 sq ft. This would increase the value of the land to £7,750,000. A potential profit of £1,042,760 on an equity investment of £2,972,240. A potential 30% profit.

Potential Profit From An Increase Re-Sale Values

The valuation at present is using a conservative re-sale value of £165.00 per sq ft. The value of properties per sq ft is generally dependant on the size of a property. That is to say that a terraced house will sell for more per sq ft than a large detached house next door. By changing the mix of houses on the site, we will increase the number of smaller houses thus increasing the value per sq ft.

In addition, examples of new builds in the area indicate that the £165.00 per sq ft value is low.

Barratt Homes have developed 150 residential units in Weavers Linn, Tweedbank. They have achieved an average re-sale price of £174.00-£197.00 per sq ft, depending on the size of the property.

Trimontium Heights, Melrose has been developed by Rivertree Developments and is a mixture of 300 residential units. Their 2 bed semi detached houses (1,137 sq ft) are being sold for an average £220.00 per sq ft and their three bedroom semi detached houses for an average of £225.00 per sq ft.

These figures are up to 30% higher than those used in our valuation. Add to this a conservative 4% increase in house prices over the next twelve months and it is easy to see the potential increase in value of our site.

Location

The subject property is located in Newtown St Boswells, a small rural village approximately 2.5 miles south east of Melrose, in the Scottish Borders council area of south east Scotland, adjacent to the English border. The Scottish Borders occupies the part of the Southern Uplands adjacent to the frontier with England and stretches from Tweedsmuir in the west to the North Sea in the east. It is predominantly rural with a number of villages and towns scattered throughout the area.

The Scottish Borders are one of the 32 local councils in Scotland. It is bordered by Dumfries and Galloway in the west, City of Edinburgh to the North and Northumberland to the south. It is the 6th largest council area encompassing 4,732 Km2. There is a population of 106,764 in the council area with 1,199 inhabitants in Newton St Boswells which is the administrative centre of the area. The Scottish Borders are unusual as there is no clear regional centre; instead the region covers a number of market towns and villages such as Eyemouth, Hawick, Jedburgh, Melrose, Peebles, Selkirk and Galashiels. As such there is no main centre for urban development. The majority of the council area is farm land with the regional market being located in Newton St Boswells.

Newtown St Boswells is situated on the Bowden Burn close to its confluence with the River Tweed and 3 miles south east of Melrose and is home to the administrative headquarters for the Scottish Borders Council. The principal towns in the Borders serve as centres of agriculture, light industry and textile manufacturing, although close proximity to Edinburgh permits a significant number to commute to the Capital. Newton St Boswells is situated 2.5 miles south east of Melrose, 7 miles south east of Galashiels and 38 miles south of Edinburgh. The nearest large town is Melrose which is located off the A68 on the A6091. The nearest hospital is Borders General Hospital (BGH) which is 4 miles north west of Newton St Boswells.

A large auction mart is the main presence of the centre of the town although this could soon change. A new site on the other side of the bypass has been earmarked for a new multi-million pound mart and visitor centre creating one of the biggest auction marts in Scotland. This move would make way for a sizeable residential development on the former site. This would be part of the 900 house expansion of Newtown which will serve as a commuter town for Edinburgh through the Waverly Railway which will terminate in nearby Tweedbank.

The Greenfield site extends to circa 10.8 acres and lies to the north west of the town of Newtown St Boswells to the west of the B6340. It is situated 38 miles to the south of Edinburgh in the heart of the Scottish Borders. The nearby A68 runs from Edinburgh, Newcastle and the south.

Scottish Market

According to the latest quarterly Scottish House Price Index from the Bank of Scotland the annual rate of UK house price inflation is 10.7% to the third quarter of 2007. Consequently, the average house price in Scotland has risen 14.2% to £141,158 , which is approximately 29% less than the UK average of £198,898. Lanark has followed this national trend with prices up 11 % over the year to an average of £160,497.

As for the remainder of 2007, economists are predicting that interest rate rises in the first half of the year and general uncertainty over future rises before the end of 2007, will impact upon growth in the housing market in Scotland. Recent rate rises have put a squeeze on house holders' finances, along with high Council Tax bills, causing house price inflation to slow.

However, sound economic fundamentals and an ongoing shortage of housing supply will continue to support house prices for the foreseeable future. The average house price in Scotland is forecast to rise by 10% throughout 2007, above that of the UK average forecast at 6%.

Ownership and Taxation

This property is owned through a UK partnership. Investors can either choose to invest through the Ftsie Property Stock Market using our trust company or as a partner. (as a partner your name or the name of your company will be noted on the deeds) To become a partner the minimum investment is €50,000.00. Partners pay a lower commission when purchasing and selling shares. (see below)

Both methods have identical tax implications. As a partnership, there is no capital gains tax charged to the partnership on the profits . The profit is passed directly to investors without deduction of tax or any witholding tax. This is ideal for investors in offshore juristictions, or investors purchasing through offshore companies. It is up to investors to declare their profit. New Zealand residents can only invest in this property as partners.

Commission Reductions

Members investing over £5,000 in this property will recieve a discount on the standard commission we charge.

Investment upto £5,000 - 2.5% Commission

Investment of £5,001-£10,000 - 2% Commision

Investment of £10,001-£25,000 - 1.5% Commision

Investment of £25,001-£100,000 - 1% Commision

Investment of over £100,000 - 0.75% Commision

The commission discount will be applied once an order is accepted.

For larger investors, we are able to offer offshore facilities to reduce or remove potential taxation.

Total share price: £10.25

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