Strict purchasing criteria
SAHPI invests in existing and readily available residential housing stock, which is made fit for purpose and sold quickly at a profit. The focus is primarily on Distressed properties and Gap sites (including brownfield sites) where planning permission is assured. All property is purchased unencumbered for cash and always below market value. The group will also consider appropriate joint venture arrangements with developers.
Highly disciplined and independently monitored protocols are in place to ensure that each development provides a built-in and minimum margin of 2.1% per month on funds outlaid. The short-term nature of each development (3-12 months) helps avoid market fluctuations and protects margins on the way in or out. In common with all investments, property investment also has its risks. The property market is cyclical but by blending several niche components, it is possible to avoid market volatility and geographical hot and cold property spots.
Strict purchasing criteria, combined with a thorough commercial vetting procedure of potential joint venture partners and the application of professional project management controls, ensure that developments are completed on time and on budget.
Derisking the investment
To reduce the risks to all parties, the group’s focus is on four distinct types of property, applying a tried and tested development solution to each type. Properties are sourced through the group’s network of connections and are usually purchased ‘off market’. Prior to any acquisition, a main board director and an operational board director are required to verify that the potential purchase meets all the base criteria.
Speed is of the essence
A further key element in the derisking process is speed of completion/turn around: our protocols stipulate that any development must be completed within 3-12 months. Adopting a short-term approach, helps to ensure that each development produces the required margin and profit, in preference to seeking long term capital growth or returns from rental yields.