Redmond capital/Fexco UK property syndicate

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therave

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not sure if this is in the right classification so please move if needs be.

bascially attented the Fexco presentation last night in Cork,given by Willie Redmond.
great presentation and looking to see if anybody else was there or will be going over the next few weeks and what they think...

to explain,
it is basically a Fexco product,property syndicate,25k entry fee hoping to raise 3 million and then raise non recourse funding to buy an office building in the UK.
yield on the building to be about 5% pa,sell in 7 years and distribute the profit.
you get your 25k back and the projection is another 20k on toop of it,this i was told when asked afterwards.
25k ncludes all fees and no more to contribute after that amount..
 
it was in the Imperial hotel and was on for about 45 minutes with questions afterwards..they are doing a few more around the country..
give fexco a ring in cork as the letter i got is in the recycling now and the presentation last night didn't give the other dates
 
ok - thanks for that. Hopefully there will be a few more people out there who will know a bit more or have any opinion on it.
 
a 5% yield a pretty poor return given that base rates in the UK are 5.5% and set to go to at least 5.75% in the near term. why do you think that a group of Irish investors are interested? do you not realise that for any UK investor that yield would not cover their cost of capital.
 
johnboy,
only relaying what i was told.although the guy behind me was asleep and snoring so hearing was a small problem..
the presentation did say that the rent roll would cover the morgtage and the morgtage would be at a fixed rate for 5 years,the profit comes from selling the building after the 7 years..
 
therave said:
not sure if this is in the right classification so please move if needs be.

bascially attented the Fexco presentation last night in Cork,given by Willie Redmond.
great presentation and looking to see if anybody else was there or will be going over the next few weeks and what they think...

to explain,
it is basically a Fexco product,property syndicate,25k entry fee hoping to raise 3 million and then raise non recourse funding to buy an office building in the UK.
yield on the building to be about 5% pa,sell in 7 years and distribute the profit.
you get your 25k back and the projection is another 20k on toop of it,this i was told when asked afterwards.
25k ncludes all fees and no more to contribute after that amount..
Click to expand...

Where is the expertise in the UK commercial property market coming from? - I didn't realise that Fexco had branched into property investment as well as everything else!

Have you looked at other guaranteed rental schemes available? What happens if the property value doesn't go up?

Btw I'm not being negative I'm just asking the questions that need to be asked
 
therave said:
johnboy,
only relaying what i was told.although the guy behind me was asleep and snoring so hearing was a small problem..
the presentation did say that the rent roll would cover the morgtage and the morgtage would be at a fixed rate for 5 years,the profit comes from selling the building after the 7 years..
Click to expand...

to get someone interested in buying this building off the syndicate at the end of this period there needs to be both an income and capital appreciation incentive. you do not say if the rent is going to increase over this period? check to see if there are regular rent reviews - if not then you need to ask yourself why anyone would pay more than you have for the property.
 
hi all, to answer some of the above
redmond capital are the experts and running the scheme as an investment product for Fexco.
I looking at other schemes now as well but my main point here is,was anybody at any of these presentations and what did they think of the presentation and wht was being said and also is anybody familiar with the firm redmond capital,they have a web site.
i was impressed with the owner,Willie Redmond and he does look to have the experience and the clients,having done these schemes on a much bigger scale for the likes of IIB ,a few stockborkers and the IMO (doctors)

JOhnboy,
i agree with your comments ,presentation said that the builing chosen will have a rent review due in the time the building is held by the syndicate.they will be looking for either something let to the government on a long lease or a blue chip company,both with good covenants.

the risk at the end of the day is that the building does not increase in value,specifically this will be an office building not retail or warehousing
 
Hi Folks

While I've absolutely no relationship or vested interest here, I would comment as follows, if I may:

* A 5% yield on a decent commercial property in any of the better locations in the UK, coupled with a decent covenant is not at all uncommon. I'm suprissed at some of the comments above to be honest, clearly you've not done much research in this sector (although entirely correct, in terms of considering the GBP£ cost of funds-vs-Gross Yield). The same point could easily be made, if anyone is considering investing in a house in Ireland etc !

* Basically, the Gross Yielf of c5% would suggest a good covenant and location (most likely a city / very near a city with strong access etc). Can you provide details on who the tenant is, how long the lease is for, where the property is situated etc pls ?

* The comment about the rent servicing the mortgage - purely refers to the senior commercial loan associated with the acquisiton of the commercial investment property (ie it will service circa 70% LTV, with all the €25k investments getting no annual return from the rental income etc). This is done quite regularly by various investment funds, on a non-recourse basis to the individual investors.

* Both capital & rental growth would be expected, but not guaranteed in this kind of deal. Basically, it's assumed based upon historic growth in the UK Commercial Investment Marketplace - along with considering such factors as expected renal increase at the next rent review on the property (I'd guess it's a 5-year review, typical for most commercial investments).

* Points to note which may help some people justify the Yeild and this type of investment are:

1) It should be non-recourse to you, in respect of the senior loan to be taken out alongside your investment, to buy the property

2) It's managed throughout the period, without the investor having to put any ongoing work into it

3) Generally, commercial investments in the UK are to good tenants, on reasonably long leases with no break clauses & on a full repairing & insuring basis (so much lower risk of the property becoming vacant etc)

4) This type of syndicated deal offers "small" personal investors the chance to become involved in a commercial investment - probably permitting them to diversify their overall investment risk etc

5) UK Commercial Investment Market has traditionally been the largest in Europe, hence continued strong demand etc.

6) Legislation is very similar to our own, coupled with there being no language barriers (usually ;)) & locations etc we can easily relate to - hence Irish are very fond of UK investments.


While there are no guarantees with any of these type of investments, they suit some people very well given there is no ongoing work associated with them etc & are considered, a "low" risk overall, from what I've seen in the marketplace over a good number of years.

Cheers

G>
 
hi Garrettod.
no building is yet identified according to redmond capital.
they did say that the building would be selected on the basis of a good covenent,non recourse finance,to a government or blue chip client .
i think it looked like a good investment and the reaon i posted here was in the hope of getting answer like your and questions and comments like the above
thanks again
 
Further presentations are planned for the Munster region, as follows:

MONDAY 29TH, JANUARY
8PM
CLONMEL PARK HOTEL

TUESDAY 30TH, JANUARY
8PM
SEVEN OAKS HOTEL, CARLOW

WEDNESDAY 31ST, JANUARY
8PM
WEST COUNTY HOTEL, ENNIS

THURSDAY 1ST FEBUARY
8PM
THE ARCHES BAR, MALLOW
Click to expand...
Prospectus and application forms available to Fexco clients on request.
 
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