Business
Exchange of contracts
Exchange of contracts.
About this update from Audioboom Group Plc
[{"type":"text","content":"\n RNS Number : 9594E Off-Plan Fund Limited (The) 02 October 2008 \n \nThe Off-plan Fund Limited\n2 October 2008\n\nThe Off-plan Fund Limited\n\nContracts exchanged in respect of completed units in Walton-on-Thames, Surrey\n\nThe Board of The Off-plan Fund Limited (the 'Fund'), which specialises in providing forward finance to UK housebuilders, is pleased to announce the exchange of contracts for the purchase of 10 apartments in a recently completed development in Walton-on-Thames, Surrey at £165,000 per unit, equating to a discount of 21% to the prevailing average 'Red Book' valuation of £210,000.\n\nBackground\n\n\n\nThe Board and the Fund's investment manager are of the view that prevailing market conditions offer the Fund excellent opportunities to buy nearly or recently completed units which developers are willing to dispose of at deep discounts to list prices and attractive discounts to independent Red Book valuations, in order that they can fully exit a development, satisfy financing arrangements and avoid further marketing costs.\n\n\n\n\nAlthough the main focus of the Fund has been to provide forward finance to UK housebuilders, there is a lack of quality new developments coming to the market as developers are either not starting or are mothballing projects until the market improves. The investment manager is finding it increasingly difficult to source quality deals on the existing financing model, due to lending banks' aversion to risk, without committing far greater deposits. Even where it appears that deals can be secured on that model, prevailing market conditions add to the risks inherent in any early stage development financing.\n\n\n\n\nWhen the Fund was established this stage (although not the particular circumstances and extent) of the property cycle was anticipated and the AIM admission document authorised the Board and the investment manager to take advantage where they believe the realisable value of potential acquisition properties is such that their on-sale would generate a profit for the Fund. The Board has therefore ...