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What is a good current investment example for PBSA investors?

by Nikki Dale -

It’s all very well with our insights to the industry and research we conduct to predict the PBSA market – with its counter-cyclical attractiveness – will ride this unprecedented pandemic-wave and come out the other side relativity unscathed.

However, with due diligence as paramount as it’s ever been, lets run through a great example of an investment that ticks all the boxes and promises to be a successful and fully occupied project by September 2020.

What is Horizon, Sunderland?

Horizon is a refurbished office building that’s been transformed into 150 fully furnished, self-contained studio apartments. Each studio is finished to a high specification.  It provides all the needs of a single person, with just the right furniture and finishes for comfort and functionality; with ample storage and appliances and space to cook.  Plus the apartments boast spectacular views of the city, canal, sea and gardens.

The apartments are complemented by essential facilities for tenant’s convenience and wellbeing: on-site laundry, study area, a gymnasium, a cinema & games room and high-speed WiFi.

The best of both worlds with mixed-use planning

Sunderland is very popular for student renters and there are buildings in the city that provide student-occupant-only accommodation, whereas Horizon has the best of both worlds.  With no restrictions it can be tenanted by students, first-time renters leaving university or home, as well as young professionals – which is “a positive integration” agrees Jordan Halstead, JH National, management & lettings.

READ ARTICLE: Sunderland is an untapped area for investors says Jordan Halstead of leading Management Company JH National 

Return on Investment

Horizon studio apartments start at only £53,995, cash-investment only.  It’s a relatively untapped city for investors so prices are reasonable, and in-turn bolsters the return they offer.  This project to investors stacks up just like a PBSA investment as provides 9% net p.a. rental return assured for 3 years.  Based on £53,995 this is an assured return of £404 net per month/ £4,800 per year.

What is important to highlight about this assured rental return is the extra peace of mind it offers, whereby the developer is holding a full year’s rental in escrow for the protection of all parties.   As aforementioned this project does have mixed-use planning, therefore an amount of SDLT is applicable on completion.

Completed and tenanted

Horizon is fully complete.  It came to fruition in February 2020, so brand new to the market.  It successfully completed and the management and letting company managed to move in 50% of its tenants before the UK’s lockdown.

Future occupancy

Currently occupied with majority of young professionals, Horizon has a waiting list of students lined up for September 2020.  Speaking with a Horizon developer representative late April, he said:  “We have experienced a high number of enquiries recently.  They are students seeking to urgently secure studio accommodation for this September via our Horizon project website, which we send straight to JH National to book-in and contract.”

CLICK HERE – for more information on the completed and tenanted Horizon, Sunderland project

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