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Barwood Capital’s fourth “new homes” fund beats its subscription target


2nd March 2021

Barwood Capital has beaten its equity-raising target by 20% for its fourth residential development package, BRIP 4, to raise over £4.8 million.

Private investor demand for BRIP 4 has increased with 33% new investors, which for the first time included two syndicates. Existing BRIP investors demonstrated their continued confidence in Barwood’s strategy by rolling over returns from BRIP 1.

Barwood Capital launched its innovative Barwood Residential Investment Platform (BRIP) in September 2018 as a new and efficient way for investors to access value in the UK’s regional residential market with ambitious plans to fund new home developments in partnership with established SME housebuilders.

BRIP appeals to private investors with an interest in residential investment or property development who would traditionally purchase a single home as an investment.

The minimum investment of £250,000 per investor is deployed by Barwood Capital into three or four development schemes to spread risk geographically across an average 45 homes. The developments generally consist of spacious family homes with gardens, in sought after locations outside central London.

BRIP is forecast to deliver investor returns exceeding the 25% target return on capital, reflecting a 12%-15% IRR per annum over an average 30 month investment period.

BRIP covers a wide spread from Yorkshire in the north to the south coast and east to Norfolk. BRIP 4 has a strong pipeline of development projects in partnership with local developers in progress toward acquisition. Terms have already been agreed to purchase two sites, one in Suffolk which will be 18 open market homes and another in Kent, which will be 10 new homes close to the High Weald Area of Outstanding Natural Beauty.

Steve Chambers, director, Barwood Capital said: “We have exceeded our equity raising target and closed BRIP 4 to new investors as we have a limit in place to ensure that we can invest quickly and efficiently. Our strategy is to deliver at least a 25% return on equity by investing in quality sites that will provide well designed family homes in attractive locations. Our investors are willing to look beyond the immediate challenges and take comfort from the continued undersupply of quality housing in some of the most attractive and desirable regions of the UK, which we believe will support a resilient sales market in the future. The platform appeals to investors because it means they can spread their risk, with an average £5,000 invested in each home in every BRIP package.

“Across our portfolio of residential sites, we have seen the sustained demand with many buyers looking to make substantial changes to their living arrangements. The pandemic continues but with lockdown 3.0 having a roadmap to exit, we expect this theme to continue. Remote working has become the 'new normal' and families are looking to move out of the cities into more spacious homes in rural locations, with the daily commute becoming less frequent. This structural change is one that underpins our investment strategy and, since the first lockdown began, we have sold 75% of the available homes in our portfolio.”

BRIP 5 is due to launch in early summer 2021.

 

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