CapitalRise, the prime property investment platform founded earlier this year by Finchatton’s founders, has launched its third seven-figure crowdfunding project, raising £1m for a development of five townhouses and four apartments just down the road from Harrods in Knightsbridge.
The 42,000 square foot scheme on Yeoman’s Row is a joint venture by Finchatton and another (unnamed) developer, trading under the “YRPL” banner, and is estimated to be worth £106m once completed. One of the townhouses and all of the apartments have already been sold, bringing in £27m in pre-sales at an average of £3,300 per square foot; practical completion is anticipated by the end of 2017. Remaining townhouse units – which come in at 6,000 square feet a-piece and offer basement gyms, a car lift to a subterranean car park and a 24-hour concierge service – are due to come to market early next year.
Investors are being invited to put in any amount above £1,000, as part of a bond issue by CapitalRise to raise the £1m crowdfunding target. The company is expecting to deliver a 10% annual return on investments…
Yeoman’s Row in Pictures
CapitalRise was launched in July by Finchatton founders Alex Michelin and Andrew Dunn, with former Wonga chief Uma Raja as CEO. The business has already completed two successful £1m crowdfunding projects, raising money for developments on Eaton Square and on Grosvenor Square. A first batch of interest – amounting to around £20,000 – has already been paid to investors in those projects, and now the company has shared some fascinating insights into the demographic breakdown of its investors…
Given the low minimum investment threshold – just £1,000 to get involved in a super-prime Mayfair or Knightsbridge property deal – and relatively punchy promised returns (in the 10-18% range), it’s unsurprising that a fairly broad church of “everyday” punters is signing up to play. CapitalRise reports a spread of investors ranging from young professionals to parents, to retirees.
The youngest investor so far is just 20 years old, and 20% of all investors are in the 20-34 age range; “Millennials” apparently make up 23% of CapitalRise investors. 35-44 year-olds account for 32% of investors, with women making up nearly half the total invested amount.
Uma Rajah, CEO of CapitalRise: “It has been really interesting to see how many Millennials and young professionals are taking up the chance to invest in high end luxury property that would normally only be available to institutions or high net worth individuals.
“The first two projects were really successful and we have just paid out £20,000 in quarterly interest payments. This type of investment suits everyone whether you are young professionals saving for a deposit, parents saving for their children’s future or investing for their retirement – we are attracting people who are looking to get more from their money by investing in London’s property market.”
Alex Michelin, CapitalRise co-founder: “We are bringing the opportunity to invest in high end real estate that was previously only available to financial institutions or high net worth individuals.”
“The right property in the right place is still a valuable investment even in these uncertain times. In fact, we think that Brexit and Trump’s election will only make them even more attractive.
“The property market would have to fall by more than a third for CapitalRise customers to lose money on their investment.
“We are so confident in the projects that CapitalRise invest in that we all personally put money into each of the schemes.”
CASE STUDY: A millennial investor in Eaton Square
Belle Holden, 23, is an interior designer from Earlsfield, who works for Finchatton. She invested £2,500 in CapitalRise’s first investment – in Eaton Square, Belgravia, which was fully-funded within eight days – in order to start saving for a deposit on a house.
“I invested in CapitalRise because my money was earning nothing in the bank and I decided to take a more active role in saving for my future, especially for a deposit for a house.
“Everybody wants to get on the property ladder – the earlier the better – but when you earn around £30,000 per annum like me, it’s virtually impossible in London.
“You watch as properties rise in value and feel you are missing out. At least with this investment I am a getting a return higher than inflation and I feel I am benefiting from the housing market.
“I work in property and so know that the returns can be high if you get the basics right – and so I am pleased that I can invest where my interests lie. I checked out the properties and all the details, and while there is always risk, I felt that the sums added up.
“In terms of my experience, investing through CapitalRise was very simple and straightforward. The website is very informative, without being overwhelming and it was extremely clear as to exactly where my investment was going and how the course of the investment would pan out.
“Capital Rise is the only website I have come across where I can invest in this kind of property without being a millionaire. I really do think it’s a great way to start a pot and is encouraging to get on the property ladder in London as early as possible.”