Business Reporter – Finance – Why is everyone talking about Real Estate Debt Investment in the North of the UK?
In the bustling, complex landscape of investment opportunities, navigating the intricacies of real estate debt investment can seem daunting. PMJ Capital’s unique new investment arm headed up by Damian Ainsley and his highly experienced executive team offers a beacon of wealth opportunities for investors.
High net worth individuals, family offices and discerning fund managers alike seeking untapped investment opportunities that command stability, yields and returns are now able to access through PMJ Capital’s 40-year experience and expertise a dynamic portfolio of real estate investment opportunities located in the North West of England. Damian Ainsley says “The North West is undergoing significant built environment changes, a location previously not a go to investment priority we are seeing exceptional returns for our clients willing to step out of their geographical comfort zones”.
Unveiling the unique
At PMJ Capital, we wear our North West heritage as a badge of honour. We are more than just another lending institution; we are deeply embedded in our local communities, directly fuelling the growth of SME developers and contributing to the growth and regeneration of real estate through tailored finance solutions. Our core focus on residential conversion and refurbishment projects speaks to the heart of local development, driving positive impact investment and revitalisation and building stable, sustainable homes for the future.
Early last year, we provided funding for a former chapel in Macclesfield. We assisted with the purchase with 60 per cent loan to value (LTV) on day one, and provided 100 per cent of refurbishment costs with a total loan amount of £380,000. The client has converted this dilapidated building into a four-bed, three-bathroom luxury detached property with a current market value of £850,000.
We were approached by a local developer acquiring a vacant former children’s day nursery in Radcliffe, Manchester. Our client plans to convert this into apartments for a local housing provider. PMJ has provided funding towards the purchase and will be funding 100 per cent of the works, with a gross delepment value (GDV) of £920,000, 58 per cent LTV and 56 per cent LTGDV. The client’s scheme, The Rock, which PMJ provided funding for, has been shortlisted for the 2024 Housing Design Awards.
A formula for success
With typical investment amounts averaging £500,000 and durations spanning 12 to 18 months, our offerings strike the perfect balance between yield and security. Every investment is underpinned by a first legal charge, safeguarding your capital at a maximum of 70 per cent LTV.
It’s natural for investors to harbour concerns about repayment and recovery. However, our robust underwriting process leaves no stone unturned. We won’t simply verify the borrower credit worthiness, the project viability and valuations – we want to understand the borrower. Typically, a developer has the choice of close to 500 specialist lenders and traditional institutions throughout the UK, but our relationship-focused approach means we want to know the medium and long-term aspirations of the developer, what their experiences have been like to date, what challenges they’ve faced, as well as their strengths.
With our directors’ 80 years of combined experience in specialist finance, property and construction and relationship management for major financial and accountancy institutions such as Bank of Ireland, NatWest and Cowgills, the ability to provide advice, guidance and surety alongside the capital ensures that SME developers view us as a trusted partner, rather than just a source of capital. These relationships themselves help to mitigate risk, and go a long way to maintaining our 80 per cent repeat borrower record.
Our track record speaks for itself – of the 450-plus loans, providing over £200 million of funding, we’ve experienced only a handful of defaults. For us that represents 0.7 per cent, compared with an overall commercial real estate debt of around 4 per cent. Horrifically, some reports state that real estate debt funds have been as high as 11.2 per cent. While we cannot speak for others, a loan going into default means failure to repay beyond any agreed extension period, and in each of the cases 100 per cent of capital and interest was recovered, without having to enforce repossession of the security asset.
Stability amid uncertainty
In today’s volatile market landscape, stability is the holy grail of investment. While traditional equity markets dance to the whims of global events and economic indicators, real estate debt investments offer a tranquil harbour from the storm. Our meticulously curated portfolio provides a haven from market fluctuations, delivering steady, predictable returns year after year, with a focus on:
Geographical location: PMJ Capital’s presence and expertise lies in the North West, where we highlight opportunities for high net worth individuals, family offices and fund managers.
Local community engagement: PMJ Capital is deeply embedded in local communities within the North West. We not only directly contribute to the growth and regeneration of real estate in the area through tailored finance solutions, but also sponsor the North West Homebuilders Awards and support local charities such as Bolton Lads and Girls Club.
Residential conversion and refurbishment: The company’s core focus is on residential conversion and refurbishment projects within the North West, and a specific interest in real estate development activities aimed at revitalising and stabilising local communities.
Investment amounts and durations: Typical investment amounts average £500,000, with durations spanning 12 to 18 months. This provides some insight into the scale and timeframe of PMJ’s investment projects within the region.
Risk mitigation and stability: PMJ Capital is underpinned by its robust underwriting process and security of investments, with every investment being backed up by a first legal charge. We also highlight the stability of real estate debt investments amid market fluctuations.
Investor community: PMJ Capital work with high-net-worth individuals, family offices and seasoned business owners, with a focus on attracting investors who prioritise stability and wealth preservation.
Experienced, tried, tested and proven
When it comes to returns, credibility is key. While financial advisers and their clients may traditionally flock to public market equity investments in search of high-risk, high-reward opportunities, our private market real estate debt offerings provide a compelling alternative. With a team of seasoned experts at the helm and a track record of success spanning close to a decade, PMJ Capital offers a level of trust and reliability that is unmatched in the industry.
Meet your ideal partner
High-net-worth individuals, family offices and seasoned business owners: these are the pillars of our investor community. With a penchant for diversification and a thirst for stable returns, they seek refuge in our transparent, dependable investment vehicle. Whether it’s exploring private debt or seeking refuge from the volatility of equity markets, our offerings provide a sanctuary for wealth preservation and growth.
Transparency, every step of the way
We understand the importance of transparency and accessibility. That’s why we provide investors with comprehensive loan details, valuation reports and borrower histories prior to investment. And with a dedicated member of our investor relations team guiding you through every step, you’ll always be informed and empowered to make sound investment decisions that are right for you.
In a world of uncertainty, PMJ Capital is a safe pair of experienced hands and stability delivering simplicity, prosperity, education and unique opportunities in a complex market. Join us on this journey towards financial security and success. Together, we’ll unlock the potential of real estate debt investment and pave the way to a brighter tomorrow.
Access PMJ’s wealth preservation programme: apply for a free consultation today
