In late 2018, The Collective approached Reditum seeking joint venture financing for a pre-planning and development opportunity on an unconsented site in Earlsfield.

The original business plan entailed obtaining planning permission and developing a 300+ unit co-living scheme with The Collective as both Development Manager and end operator of the asset.

Jak was the primary point of contact for Reditum from planning to completion, overseeing all aspects of the transaction from initial underwriting, negotiating terms and drafting of legal agreements to liaising with Reditum’s investor base to raise the required capital.

Following completion, Jak remained involved in all aspects of the transaction, ensuring the investment was being appropriately managed. This involved liaising continuously with The Collective, various third party consultants working on the transaction, as well as Reditum’s own investor base to keep them well-informed of the deal’s progress.

In July 2019, the scheme received resolution to grant planning for 292 units, less than a year from Reditum’s initial investment, and subsequently received an amendment to planning to grant a further 18 units, bringing the total to 310 units. This resulted in a significant uplift in the underlying land value and a substantial paper profit for Reditum.

By April 2020, after planning permission had been formalised and designs completed, we worked to line up senior development finance and subsequently secured further capital from Reditum’s investor base to take the project through to the development phase. The senior lender had signed terms and progressed to legals, however, due to market conditions, they withdrew their offer in April 2020. Subsequently, Jak helped to refinance the existing acquisition loan with a new bridge lender to prevent the initial bridge loan defaulting and enabling the project to continue.

Following the withdrawal of the senior construction finance in April, Jak helped Reditum to negotiate a sale of their stake in the asset to The Collective – although the original business plan saw Reditum moving into the development and stabilisation phases, it was decided that a sale was the optimal route given the attractive return profile that a sale presented, as well as the risk around the transaction in a post-Covid world.

Subsequently, Reditum exited the transaction in September 2020, capturing a cash return of 1.9x their original investment and an annualised return in excess of 50%.