Welcome To Chrysalis Holdings
Chrysalis Holdings is a newly formed SPV listed on the
MTF Markets of the Luxembourg Stock Exchange whose prupose
is to aquire, develop and hold UK real estate in recongnised city centre locations.
Opportunity
It’s focus will be on the acquisition of developed projects in distress at below market rates, then to deploying our existing construction and professional teams to build out and then to dispose of the completed units. To complete the strategy, the Company intends to utilise a percentage of funds raised to invest in a yield generating property portfolio either through retention of completed builds or focused acquisition, so as to provide liquidity from day one and compliment the overall investment strategy.
It has already identified a number of distressed UK real estate opportunities, currently available for acquisition subject to negotiation and have professional teams ready to commence with a project specific strategy.
Objectives
The Company hopes to raise a minimum €100,000,000.00 upon successful listing onto the LuxSE and within two years complete the full subscription of €500,000,000.00.
There is a minimum number of acquisitions day one of €25,000,000.00 with a further funding requirement of €25,000,000.00. Therefore on day one there has to be a minimum of €50,000,000.00 raised on the LuxSE for the Company.
The market in UK
Between 2018 and 2028 the UK population is set to grow from 66.4m to 69.4m (Govt ONS) of which 85% live within urban areas. The average number of people per dwelling in the UK is currently 2.4 (Govt ONS). This leads to a projected short fall in housing accommodation in urban areas by 2028 of 1,108,000 units. Combining this population growth with a significant drop in household size to 2.1 by 2039, the pressure on the UK housing stock is intensifying. The Government, in a Parliamentary paper in 2020 highlighted the need for 300,000 new houses every year and the supply of 1 million new houses by 2024. This was backed by work completed by KPMG and the Government review of housing supply.
In addition, the Government forecasts a need for 145,000 new homes each year to address the social housing alone, over the same period.
Market forecasting
IThe well documented shortfall in the housing supply and increasing demand can result in only one outcome, the increasing value of housing. The office of national statics demonstrates an annual average house price increase of 5.4% to October 2020 and a 5-year figure from January 2015 of 29%. With an increasing population and a reduction in numbers of people per dwelling, this trend is set to increase. Rightmove (www.rightmove.co.uk) declared a year-on-year house price inflation in December of 6.6% and is now forecasting growth of 4% even in 2021, still under the shadow of Covid-19. On a longer-term timescale, the global estate agent Savills is predicting 20.4% property value inflation between 2020 and 2024, an annualized figure of approximately 5%.
The collapse of household names such as BHS, Debenhams and the Arcadia group are offering opportunities to acquire sites for development and repurposing into real estate more relevant to modern living and working. The retail giant John Lewis is in the process of repurposing its huge high street presence with plans for converting 20 of its sites into homes and its Oxford Street Flagship to become 50% mixed use. (FT property Oct 2020).
Strategy
Chrysalis Holdings aims to build a UK real estate portfolio with an asset value to exceed €625m through acquisition and/or developing on a cost base not exceeding €500m thereby gaining significant bondholder value and enhancing financial security by way of UK property assets. This provides bondholders with underling confidence the Company will comfortably achieve a high rate of return (3.5% per annum) over the next 7 years. Chrysalis Holdings is to acquire UK real estate and falling under three asset classes.
Performing asset
The efficient procurement and retention of the asset requiring little more than tenant retention and acquisition. These tasks to be outsourced to professional agents.
Full renovation/Part completed
Site acquisition or commercial failure of existing project leading to subsequent sale. Full costing and renovation through in-house teams leading to asset retention or liquidation
Asset development for repurposing
Refurbishment and repurposing of existing commercial real estate through permitted development protocols. Project ran in conjunction with local professionals ensuring the most commercially attractive options are included and allowing agents time to market and build inertia from project inception ensuring a smooth transition of ownership, in the event of liquidation. Chrysalis Holdings will ensure the retention of a minimum 20% of selected assets on a case-by-case basis, generating a continuous revenue stream. The remainder of the portfolio will be disposed of to maximize profit for subsequent reinvestment. The Board are currently examining the most appropriate opportunities available and at the point of bond listing will be in a position to acquire real estate assets for development.
Case studies
The following are summary sheets of three currently available.
Redevelopment
Asset development
