SIPP 11 – 5a Concept Park Poole Dorset
We were asked by one of our established company clients TDSI to find a new building for their Head Office. Through Goadsby Commercial we negotiated with ROK for a land purchase of 0.4 acre, together with a build contract at a fixed price.
We achieved a loan of £650,000 on a total purchase of £1.271 million. The directors had pension funds of £400,000 and so we put together a syndicate for them and other clients to make up the balance of deposit and costs. The syndicate included some of Tim Lewis and Paul Mitchells pension funds.
This was higher risk than our normal pension syndicates but we were confident in the company and its directors. TDSI took a lease on the premises equivalent to £104,000 per annum for a term of 20 years with no breaks. The building has been completed and the company moved in during September 2007.
The mortgage has reduced under the repayment terms. More importantly, an investor that put in £50,000 into the syndicate will receive an annual income of £6,500 (subject to inland revenue maxima) upon mortgage repayment, estimated to be in 6 years time. That is a rate of 13% per annum.
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