SAHPI bonds—which can be listed—are registered to the bondholder and are readily tradeable.
Safe As Houses Property Investment Guernsey Ltd (‘SAHPI’) is the issuer of the SAHPI Bond. SAHPI Ltd is a member of the Safe As Houses Group of companies, which specialises in lending to, and partnering with, UK residential property development companies.
Profit from ‘fast track’ property development
Unlike other types of bricks and mortar investments, SAHPI bondholders are not dependent on the medium/long term capital gains from house price growth or rental income. Instead, the returns from the SAHPI bond are derived from the profit the property development company makes on the sale of the property. The sooner developments are completed, the less vulnerable capital is to price and/or market fluctuations.
In return for your capital…
Every Safe As Houses Bondholder receives a loan note paying 8% a year for 5 years. Coupon payments are credited to the bondholder’s account biannually after the first year and once paid, cannot be taken back. The initial investment is repaid in full at the end of the 5-year term along with a potential performance based 32% uplift.
A fixed and regular income
Bondholders can make quarterly, annually or biannually withdrawals from their SAHPI bond after the first year.
Potential returns of up to 72%
At the end of the term of the investment, the initial capital sum is repaid in full together with a plus a potential inflation protected OTE bonus of 1% over inflation capped at 32% on the initial capital sum. In total, SAHPI investors could receive a return of 72% over the period, or an aggregated average return of 14.4 % a year. The bond is eligible for inclusion in a SIPP, SSAS, Occupational Pension Scheme, QNUP and QROP. An ISA-variant of the bond is also available which provides additional liquidity and exit opportunities for bond holders. The SAHPI bond can be purchased outside of a pension or an ISA as a ‘stand alone’ investment.
Safeguards for investors
Investor funds will be secured by a charge on property when funds are utilised. According to an independent valuation carried out by Valuation Consulting—a highly respected asset valuation firm which is used by the UK Court System and HMRC.
Further capital security is provided by adhering to the following purchasing criteria and protocols
◈ Loans made to safe as houses group companies (in order to purchase properties) are secured against tangible assets, usually property. In all instances, the pledged security will be valued at more than the loan amount—it’s that aspect which makes our bond ‘asset-backed’. Note holders will have the benefit of security via a regulated trustee which will act as security trustee for the bondholders.
◈ The minimum profit expectation of 25% per annum from each and all developments, is founded on the principal of only purchasing property which holds the potential to provide a return in excess of 2.1% a month on total funds outlaid. The average monthly return to date is in fact 6%, generating a profit of 72% a year.
◈ No property is purchased unless it is below the market value for its intended use. Through our contacts with large financial institutions—and because sellers either cannot or will not give covenants on the state of the property or its utilities—we are on occasions able to purchase at a discount of 50% to market value. (The mere act of purchasing from a financial institution automatically increases a property’s value…) Each property is completely refurbished and on completion, sold to ready and waiting ‘off market’ buyers.
◈ No borrowing is permitted beyond loan notes (other than IFISA investment) and all properties are purchased unencumbered and for cash.
◈ Based on the foregoing, the SAHPI’s balance sheet will contain primarily unencumbered property assets and a cash reserve which will grow with each completed development.
Margin based returns
Unlike other types of bricks and mortar investments, investing in the Safe As Houses Bond is not dependent on the capital gains emanating from the retention of property or yields from rental income. Instead, the returns are derived from the profit the property development company makes on the sale of the property. When developments are completed quickly, capital is less likely to be affected by price and/or market fluctuations.