EPH Sverige plc will tap into the property opportunities that exist in Sweden targeting good quality, well located, pre-let residential portfolios. Typically, these portfolios will offer net yields ranging from 5% to 8% and be comprised of between 20 and 200 units. They may also contain elements of commercial property.
EPH Partners LLP have been appointed property advisers to EPH Sverige plc providing property advisory and management services to the company. The founders of EPH Partners LLP include Paul Hogarth, founder of both Bankhall Investment Management in 1987 and, more recently the IFA support services firm, Paradigm Partners. Paul is one of financial services’ most prominent entrepreneurs and is also involved in a variety of property investment and development projects.
The other founders of EPH Partners LLP include property expert Philip Hughes of PH Property Holdings Ltd, and Nigel Evans, Bill Ridge and Huw Evans of property fund specialists Evanridge, who have a proven track record in the Swedish market over the last three years.
Up to 30 million Participating Shares are being offered in EPH Sverige plc at a subscription price of £1 per share. The anticipated term for EPH Sverige plc is five to seven years with a maximum life span of 10 years. The target aggregate subscription amount for EPH Sverige is £25 million before expenses with an expected closing date of 31 March 2009. Based on this amount, the target will be to generate a geared net internal rate of return (IRR) of not less than 12% over a five year period and not less than 14% over seven years.
Sweden was ranked as Europe’s fourth largest real estate investment market in 2007 (Source: Invest in Sweden Agency) with more than SEK140 billion (£11 billion) in total real estate transactions. EPH Partners LLP believe that with the strength of the Swedish financial institutions, combined with sound investment fundamentals in the property market, Sweden is one of the few countries to offer investors a safe port in the current storm.
There is a minimum investment level of £10k, with multiples of £1k thereafter; the investment is also suitable for both SIPP and SASS clients. IFAs can expect to earn commission of up to 6% with an additional trail commission of 0.75% of equity invested.
Paul Hogarth, Co-Founder of EPH Partners LLP, commented: “We believe that EPH Sverige plc offers an exceptional investment opportunity for IFAs and their clients. The fundamentals of the Swedish property market should provide investors with an attractive rate of return. Over 60% of the population live in rented or co-operatively owned accommodation and rental demand for residential apartments consistently exceeding supply in our target areas – the commuter towns surrounding Stockholm and Gothenburg. Capital values in South West Sweden are low, often less than the price of land and build cost combined restricting residential development in South West Sweden which creates a barrier to over-supply. As a result of State-controlled rent reviews, inflation-linked rental growth is guaranteed.
“Investors in EPH Sverige plc will benefit from efficient non-recourse local financing which will enhance returns plus pro-active asset management to maximise net operating income. In addition, hedging instruments will be used to limit the risk to investor capital from movements in exchange rates. Given the current turmoil and volatility of equities at present coupled with the dire state of the UK property market and the general lack of exciting opportunities for advisers, EPH Sverige offers IFAs and their clients a particularly attractive investment and risk: reward ratio.”
Nigel Evans, Co-Founder of EPH Partners LLP, added: “Not only does EPH Sverige plc offer the potential for the high level of return investors and their advisers are looking for, it comes with the added attraction of a secure and stable investment environment. Sweden has a strong and diverse economy with a high standard of living; it is at the heart of a region that has consistently outpaced the rest of Europe in recent years both in growth and macroeconomic performance. Plus it is renowned as a transparent, highly evolved and reliable country to conduct business in.
“By working in the Swedish property market for the last three years we have a achieved growth of over 10% per annum and we have developed a strong network of blue-chip partners, including local agents, day-to-day property management facilities, banks willing to provide non-recourse funding on favourable terms, and a range of lawyers and accountants experienced in dealing with foreign investors. The infrastructure EPH Sverige plc has in place coupled with the low risk and attractive potential rates of return on offer make this a stand-out investment in a market where such opportunities are in very short supply.”
