UK commercial property development offers investors access to a proven tax-efficient asset class that is underpinned by a freehold or long leasehold. It is an easy to understand asset class which generates capital growth and offers tax efficiency – making it suitable for both private investors and business owners. It also gives these investors the opportunity to benefit from limited market supply, and provides a strong sales position after development.
Strategy
We work together with commercial property developers to source and acquire opportunities, and to develop the land for commercial use. All sites selected have full planning permission for commercial property development.
Security
A commercial property development partnership acquires a freehold or long leasehold interest in each development site – with full title at the Land Registry. The partnership enters into a joint venture with a commercial development specialist. A contract with a construction company is then agreed, with independent cost consultants and quantity surveyors approving each stage of the development.
Project Spotlight
Haddenham Business Park
In October 2018, we entered into a joint-venture partnership with Tavis House Properties (THP) to develop twenty industrial units in Haddenham, Buckinghamshire.
A key consideration prior to acquisition was the site’s excellent transport links. The site is situated in close proximity to the M40 corridor. A building contract was agreed at a competitive price however, delays were caused when waiting for planning authorisation from the council. As a result, works for this project started 4 months behind schedule.
Having started construction in February 2020, we completed the project in February 2021. Given the numerous government lockdowns and restrictions imposed by the government during the build term, to complete construction within 12 months constituted a real success. These events reinforced our belief that working alongside JV partners that have the expert knowledge, experience, and sophisticated systems to remain resilient in difficult periods is the right strategy when managing investments on behalf of our investors.
Following practical completion, excellent sales progress was made throughout 2021, with the final units sold on 17 December 2021.
All sale prices achieved exceeded those in the original budget for the development. This, combined with costs remaining on budget and the build program being adhered to, resulted in the partnership achieving an IRR for investors that was well above our 5% target at 14.7%.
Commercial Property Development is accessible through the following services:
Stellar Business IHT Service
A discretionary managed service which provides numerous succession planning and tax efficiency options for business owners – either following the sale of a company, or to invest excess company capital to maintain tax efficiency.
Stellar Growth IHT Service
This discretionary managed service involves the creation of a privately owned limited company for each investor, to access a portfolio of asset-backed Investment Sectors – targeting 5% growth per annum.