DDF Property Bond - Series One

Capital is at risk and returns are not guaranteed.

Fixed term Bonds are not readily realisable and investors should expect to hold them for the full term.

Fixed rate Bond
Asset-backed
IFISA eligible

4.5% p.a.

Fixed return

8 mths

Term (Up to)

This is an opportunity to lend to the Downing Development Finance Group at 4.5% p.a. for up to one year, maturing on 20 August 2019. The Group makes property loans secured on a first-charge basis and has a loan portfolio of £50 million spread over 19 loans as at 30 November 2018 Read more.

Raised: £797,957
Tranche 5 closes

Project

This is an opportunity to lend to Downing Development Finance plc, a UK group making property development loans, and earn 4.5% p.a. on a Bond with a term of up to one year. Alternatively, there are Series Two and Three also available.

As at 30 November 2018, there are 19 loans secured on a first-charge basis that make up the Group's £50 million loan portfolio, the weighted average loan-to-value/loan-to-gross-development value (LTV/LTGDV) at this date was 65%. The loan book is focussed on residential development, bridging finance, non-speculative commercial development and funding for trading businesses seeking to develop their premises.

The Group, through its wholly-owned subsidiary Downing Development Lending Limited, takes a first charge over the land, buildings and assets of the company undertaking the development.

The weighted average LTV/LTGDV of the portfolio is capped at 70% and no individual loan can exceed 75% LTV/LTGDV*. This provides a buffer before Bondholders’ interest and capital are put at risk.

We recommend you carefully read the Prospectus and supporting product literature, to understand the nature of the risks involved in property development, the criteria by which the Group lends to developers and the level of due diligence undertaken.

No LTV/LTGDV is provided for the Bond itself, as the value of the Group’s assets varies too frequently for this to be accurately estimated for Bondholders over the period of the raise. The weighted average LTV/LTGDV across the loanbook and the borrower interest rate are published monthly on the updates tab.

*The Prospectus and supporting product literature details exceptional cases where LTV/LTGDV may exceed 75%.

 

About

Downing Development Finance plc heads a UK group of companies that originates and manages property loans. As at 30 November 2018, there are 19 loans secured on a first-charge basis that make up the Group's £50 million loan portfolio, the weighted average loan-to-value/loan-to-gross-development value (LTV/LTGDV) at this date was 65%. The loanbook is focussed on residential development, bridging finance, non-speculative commercial development and funding for trading businesses seeking to develop their premises.

The group is managed by Downing LLP, an investment manager with over £1 billion in funds under management. Downing managed funds have been lending to property development and asset-backed projects for eight years, funding over 60 projects across the UK. Downing has lent over £188 million of lending to SME, property development and asset-backed projects since October 2010, of which over £114 million has been repaid alongside £10 million of interest. Please note, past performance is not a reliable indicator of future performance.

The group is supported by Downing’s property and lending team including:

  • Jonathan Boss – Partner and Head of Lending. Jonathan has 20 years’ experience in the industry and has led around 100 transactions.
  • Parik Chandra – Investment Director. Parik joined Downing from p2p lender Funding Circle where he was director of real estate finance. During his time with Funding Circle, he originated over £100 million in loans.
  • John Pilbeam – Construction Director. John is a chartered surveyor with a focus on property development project management and has worked across our asset-backed and energy investment teams helping to manage construction risk.

Towards the end of 2017 the government concluded that the annual housing need in England was 266,000 new homes per annum,1 whereas the housebuilding industry was producing only 210,000 new homes annually at this time2. The housing deficit caused by this lack of supply is driving demand in the housebuilding sector. With over half of small to medium-sized housebuilders saying access to finance is the second biggest barrier to building new homes,3 the group is seeking to help address this gap in funding.

1 Planning for the right homes in the right places: consultation proposals, Department for Communities and Local Government, 14 September 2017.

2 Spotlight: Residential Property Forecasts, Savills, Autumn 2017

3 Source: Federation of Master Builders, ‘FMB House Builders’ Survey 2017’, https://www.fmb.org.uk/media/35090/fmb-house-builders-survey-2017.pdf