HUBB INVESTMENT 101

£1,300,000
(88% Funded)

60
Month Term

8.25%
Annual interest

£50,000
Minimum Investment

Hubb Investment 101 is an exciting opportunity to acquire a 94-bedroom student accommodation residence with a strong track record, in the centre of Lincoln.

The accommodation is split across 24 cluster flats; 1 x two bed, 6 x three beds, 12 x four bed, 4 x five beds and 1 x six bed.

Lincoln is a Cathedral City and is the county town of Lincolnshire – one of the UK’s largest counties. Part of the East Midlands, Lincolnshire sits on the East coast of England, to the north of Norfolk and the south of Yorkshire. Investment 101 is located centrally and just a stone’s throw to Lincoln College, a two minute walk to the city centre, and a 15 minute walk to the University of Lincoln.

Lincoln has two higher education institutions; The University of Lincoln and Bishop Grosseteste University, with a combined total of 16,329 students in the Academic Year 2018/2019.

The University of Lincoln is the city’s largest employer and the primary driver of inward investment in the city. With 14,105 students – 12,060 full time – it has seen a 35% increase in school leaver enrolments in the past two years.

The University of Lincoln is placed 20th out of 125 universities for student experience and has won national recognition for its collaboration with businesses and industries. The university’s Five-Year Strategic Plan will see an additional 4,600 students join the university with the addition of a £21m medical school.

Bishop Grosseteste University (BGU) is a smaller university with over 4,000 students, known for its arts and social science courses. The university’s Five-Year Plan includes growing their student numbers and increasing turnover from £18m to £37m. While the current demand for student accommodation comes largely from the University of Lincoln, an increase in student numbers at BGU will further increase this.

“The student accommodation market in Lincoln has seen unprecedented continual growth since 2011. Last year the university increased student intake by over 6% awarding a further 900 first year students a place at the institution.

This has seen a large external investment in both infrastructure and accommodation in the city to cope with the new demand. The university itself has invested heavily in accommodation for its first-year intake, failing to be able to build accommodation fast enough to cope with demand. The university has a 2025 masterplan which will see an additional 4,600 students join the university, currently only an additional 2,200 bed spaces are planned and thus we estimate there will be an accommodation shortage should the university continue to grow at this pace.

In the last 4 years we’ve had occupancy rates at 100% based on 51-week contracts across our portfolio of managed bed spaces and have already received over 300 enquiries for accommodation for 20/21.”

Harry Conti, Co-Founder and Director of Student Housing, Lincoln (January 2020)

* our show flat for the planned refurbishment scheme, commencing in Q3/Q4 2022

Fund Type: Secured Loan Note (also known as a Bond or Coupon)

Fund Size: £1,300,000 (£160,000 currently available)

Projected Term:  60 months (5 years)

Interest Rate: 8.25% p.a (annualising at 10% p.a. with the Incentive Scheme Bonus)

Incentive Scheme Bonus: Up to 8.75% p.a. is available on maturity of the bond, subject to the asset value exceeding 10% of its valuation on the Bond Start Date.

The % is apportioned as follows:

• 0.5% p.a. if you invest within 14-days of the Bond Instrument Date
• 1.25% p.a. if you invest for 3-years or more, prior to the Bond Maturity Date

Security: Legal charge on the SPV

Bond Instrument Date: 30th January 2020

Bond Maturity Date: 30th January 2025

Hubb Investment 101 Limited, is a special purpose vehicle (SPV) which is 100% owned and controlled by Hubb Property Group Limited.  This SPV was solely set up to acquire and manage this asset and no further assets will be held within the company throughout the duration of the term.

Minimum Investment: £50,000

Composition: 94 student bedrooms arranged over 24 cluster flats.

Latest RICS Valuation: £3,000,000

Liquidity: Certificates are not transferable and there is no guarantee of a secondary market so you should plan to invest for the full term.

Interest Calculation: The amount of interest for this opportunity is fixed over a period of time; also known as Simple Interest.

Interest Payments: Paid quarterly; on specified dates throughout the bond period. Any overseas investors may be subject to a 20% Withholding Tax, as required by UK law.

Lettings and Management: A local student letting and management company have been appointed to work alongside Hubb’s asset management team to ensure the property is fully occupied and managed successfully throughout the term.

Asset Management: The property will be asset managed to provide further security and maximise its potential to which would increase net income, yields and capital value. A building survey and Planned Preventative Maintenance (PPM) report has been carried out to proactively maintain, manage and improve the investment over future years.

Due Diligence: The financial projections for this opportunity have been calculated with consideration to the current climate. Integrated contingency lines have been included to ensure that the figures presented represent a realistic and achievable return-on-investment. As part of the asset management process, due diligence is carried out on tenants and their guarantors to ensure affordability and successful rental payments. The local student market has also been carefully researched, including the local universities to identify their plans and the potential growth balanced against the current supply of student accommodation. In our view, taking into account our research and due diligence, Hubb Investment 101 is an attractive and safe investment for investors.

Rental Information: The property is currently 100% let, achieving a rental income of £375,888.  There is a strong rental history and has been fully let since 2012. Despite its 100% track record for the last 5 years, we stress test each of our student acquisitions at a 75% occupancy rate and this opportunity successfully passes.

Exit Strategy: In line with our company’s growth plans, we intend to retain this asset for an indefinite period. As such, upon the maturity of this bond, we will launch a new bond for a further 5-10 years.

You can find our Frequently Asked Questions on the link below, WhatsApp +44(0) 7825 737647 or email o.hawthorne@hubb.co.uk