Blue Spruce Homes
creates beautiful, affordable
starter homes for young
professionals in up and
coming areas of London.
Blue Spruce’s track record shows Returns on Equity
exceeding 50% per annum.
PROJECTS
Blue Spruce builds new homes in up and coming areas all over London
LPV's current portfolio consists of:
17
sites
91
units
Purchase price
£16.8m
The current portfolio capital structure is:
Equity capital deployed
£12.3m
Loan capital deployed
£18.3m
LPV's current portfolio targets compromise:
Profit*
£5.1m
Return on Equity*
41%
GDV*
£41.9m
ABOUT
Blue Spruce creates beautiful homes for first-time buyers.
We help them get their first step on the ladder by bringing elegantly-designed homes that are eligible for Help to Buy to an otherwise under-nourished and unaffordable market.
Help to Buy supports first-time buyer purchases by offering up to 40% loans against a 5% deposit.
Through this scheme, first-time buyers are afforded a new and premium product alongside the peace of mind of the full support of a 10-year structural warranty.
Our methodologies and processes deliver exceptional returns:
PLANNING ARBITRAGE
Gaining planning permission for development significantly increases a site’s value.
Converting commercial to residential use can double the value of the commercial premises.
DEVELOPMENT
RETURNS
We acquire buildings that can be extended.
We convert buildings for £82-117/square foot and we complete New Build for £175-200/square foot.
We sell our
end product in a range of £450-£1,000/square foot.
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MARKET
KNOWLEDGE
We use meticulous research to identify areas with stable or rising prices and that are easy walking-distance from underground or over ground stations.
We carefully research sell-on prices in the areas before purchasing a building.
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BUY BELOW
MARKET PRICE
We purchase from a network of off-market brokers,
or at auction where listings, information and viewings are only available 3 weeks before the sale.
Approximately 1,000 lots per month come up for auction.
BlueSpruce has the capacity to sift this data, visit sites and analyse returns on interesting lots.
Blue Spruce’s Returns Criteria are stringent: we target 20% annualised RoE if no planning permission is granted, and 50%+ if planning permission is granted.
The first Blue Spruce company has already fully returned investors’ capital, with the more-than-100% profit reinvested into new projects.
Blue Spruce has achieved outstanding growth since January 2016
Blue Spruce Growth from Inception
PROPERTY INVESTMENT
Why invest in property in London?
London and South East England suffers from a structural housing shortage.
240,000 new homes are required each year to meet current demand levels 1.
Only 140,000 new homes are currently being built per year 1.
Q3 2017 new home registrations declined by 9% 2 – so the shortage is getting more extreme.
London’s population is forecast to increase 17% by 2030, from 8.8m to 10.3m 3
Despite Brexit, the structural shortage remains and is worsening. Demand significantly exceeds supply.
Sources:
1 Financial Times, 4 May 2017
2 National House Building Council, 26 October 2017
3 Office for National Statistics
LPV entities are managed by London Property Mgt Ltd. (LPM)
LPM target returns exceeding 18% per annum,
and has achieved annualized returns exceeding 50%
LPM’s Strategy is to capitalise on mis-priced assets due to:
Illiquid markets
Over-discounted risk
Overlooked value-enhancement opportunities
The Directors of LPM are all investors in the five LPV closed-end investment companies.
Best-in-class investment management: an example
An example of LPM’s best-in-class investment management:
October 2017, actively assessing the auction market in search of several new projects for our investment company LPV250
Best-in-class Investment Process leads to Best-in-class Returns on Equity
PROPERTY INVESTMENT
Why invest in property in London?
London and South East England suffers from a structural housing shortage.
240,000 new homes are required each year to meet current demand levels 1.
In 2019, only 174,000 new homes were built 2.
Nationally, new home registrations declined 9% in Q3 2019. In London, new home registrations declined 14% in Q3 2019 3– so the shortage is getting more extreme.
London’s population forecast to increase 17% by 2030, from 8.8m to 10.3m4
Despite Brexit, the structural shortage remains, and is worsening.
Demand significantly exceeds supply.
Sources:
1 Financial Times, 4 May 2017
2 UK Government, year to 30 June 2019, 3 October 2019.
3 NHBC, 24 October 2019.
4 Office for National Statistics.
Blue Spruce entities are managed by Blue Spruce Homes Management Ltd, an Active Real Estate Private Equity Company.
Blue Spruce's Strategy is to capitalise on mispriced assets due to:
Illiquid markets
Over-discounted risk
Overlooked value-enhancement opportunities
The Directors of Blue Spruce Homes Management Ltd are all investors in all the Blue Spruce investment companies. We have our own money in every development we manage.
Best-in-class investment management: an example
An example of Blue Spruce’s best-in-class investment management:
March 2019, actively assessing the auction market in search of a new project for one of our investment partners
Best-in-class Investment Process leads to Best-in-class Returns on Equity