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General

HOW CAN WE HELP?

We are property professionals with in-house Chartered Surveyors and most importantly are qualified and certified by RICS – the highest standard mark of the industry.

PROPERTY CHARACTER is the UK property acquisition partner of choice for domestic and overseas investors striving to capitalise in the buoyant growing British economy, especially when acquiring high quality and desirable London property assets, which always perform well and are in high demand in the European real estate market.

The Group is the operator and/or nominee for its engaged shareholders in each segregated property structure known as a Special Purpose Vehicle (SPV), ensuring the real estate development and investment is safeguarded and underlined by property assets owned by shareholders.

HOW DO WE WORK?

For more than ten years we have worked diligently to earn the real estate experience which is proven and recognized by the Royal Institute of Chartered Surveyors (RICS). This property expertise Property Character implements into two key sequentially interrelated functions: assessment activity and operational pursuit.

The first one helps potential owners with surveying requirements to source, assess, value and assist with managing real estate interests.

The second one allows investors to utilise our gained property experience in the market: prepare and arrange the acquisition process through necessary legal structures to suit investors, to acquire and maintain real estate assets, to add additional market value through planning and development components and to secure regular investment rewards via proactive asset management, as well as to ensure successful capital realisation at the exit strategy.

Both activities are independent, separate, safeguarded and adhere to RICS ethical rules of conduct and are carried out without conflict of interests.

SO WHY LONDON?

Many things start from London, even global time zones. The Greenwich Meridian marks the starting point of every time zone in the world. Indeed, London is involved in politically, economically, socially, demographically and of course culturally coordinating the world.

Thanks to a rich heritage and with English being the number one spoken language around the world, the United Kingdom’s capital is constantly attracting people and magnetising financial wealth. Historically, with regard property assets, it has been recognised that the LONDON brand:

– is one of the leading hospitality, leisure, retail, prime residential and financial global cities;

– has time zone benefits with international capital influx;

– has always been a magnet for the world’s talents;

– has healthy pre-let, rental growth, development and investment capabilities;

– has been constantly transforming its infrastructural shape;

– has cultural, educational and quality employment offerings;

– is a safe haven with positive legislation changes.

London is the place to be and definitely the start for many in terms of property investment and development. Locals need somewhere to live, organisations need premises for everyday purposes, visitors need temporary accommodation and so on. People and companies migrate constantly, putting high pressure on existing property class assets and on new developments and expansion, all as a result of the continuous demand for London real estate. In fact, the UK market is number 2 after the USA for private equity fund management.

COMMERCIAL OR RESIDENTIAL PROPERTIES?

Better economic prospects and higher yields compared with other traditional income assets than in Continental Europe, especially in the rental sector, have persisted in encouraging financial institutions and serious investors to move into commercial property in the UK. London is a safe haven. Competition from buyers, predominantly from overseas, and growth in real inflation-adjusted rents have been continuing to fuel demand and compress yields. However, the prospect of rental growth will always attract investors to the London market.

Indeed, commercial investments can be more appealing than residential buy-to-let investments, mainly because:

a) commercial returns are better;
b) new rents from tenants after reviewing are always and only upwards;
c) the commercial management function is less costly and intensive;
d) the occupancy is a long term commitment and therefore there is less risk of a property being left vacant;
e) the tenants are more financially solvent and organised;
f) lease covenants are robust;
g) the purchasing stamp duty and other taxes are less;
h) landlord and tenant legislation for commercial properties is perceived to be more even-handed as between landlord on the one hand and tenant on the other hand.

Conversely, the residential sector is far larger than any other asset class in the UK. The private rented sector in London and the UK has recently become the hotspot for large build-to-rent developments, although at the moment the housing market is still dominated by private sales. It predicts that the private rented sector will account for 40% of the market by 2025, while another 20% will be in affordable rented accommodation. Home ownership in the capital, which stood at 60% in 2000, will have fallen by almost 20%.

The residential sector is easy to comprehend for everyday investors. The commercial sector requires specific property knowledge and asset management, insurance protection and many other regulatory and compliance issues. We are the certified and qualified Charted Surveyors who can help and manage both complex commercial and residential issues.

So where is the happy medium? In our professional opinion the optimum strategy is diversification. We assemble a balanced shareholders’ residential and commercial portfolio with both property investment and development projects to mitigate possible risks which are hedged by mixed-used class assets to allow for any possible market price fluctuations.

PROPERTY INVESTMENT (i.e. INCOME-PRODUCING) OR PROPERTY DEVELOPMENT?

Property Investment (i.e. Income-Producing) projects provide immediate income and secure letting for a fixed period. The interest is saleable.

Property Development projects are riskier than Property Investment (Income-Producing) projects, but can offer increased returns if the property lets quickly on good covenant terms.

Each activity is separately characterized by its own pattern where cost overrun or delay in receipt of income and capital contributions affects short term performance and cash flow.

Each activity has common characteristics and requires significant residential and commercial property expertise, financial, legal, compliance, conveyancing, lease, building, planning, design and architectural aspects and other related professional experience and knowledge of the particular real estate markets. We are the certified and qualified Charted Surveyors who can help and manage both complex property investment and development issues.

Shareholding Opportunities

WHAT PROPERTY DEVELOPMENT AND INVESTMENT OPPORTUNITIES ARE THERE WITH US?

Investment via Property Character is only available to registered investors and they can view investment process with related investment project information, structures via password protected access. Also full details of investments will be provided on request by investors through this website or directly to Property Character.

By selecting property investment and development projects to invest in using our website and paying an investment amount the investor agrees to the acquisition by him of shares or loan notes in an SPV which will acquire the selected property.

Following receipt of the investor’s funds with the aim of purchasing the property, the investor will receive a share certificate or loan note certificate as evidence of the investment.  A copy of the relevant SPV’s Articles of Associations or a Loan Note Instrument as appropriate will also be supplied to the investor. The Articles of Associations or a Loan Note Instrument, as appropriate, will govern and detail your investment in the SPV, your position as a shareholder or loan note holder and how any income and return will be generated.

The investor will be entitled to sell or transfer his shares in accordance with the Articles of Association to the registered investors via our website. Loan notes will not be transferable. Any payments made to investors will be made without deduction of tax.  It is the inventors’ responsibility to account for any income tax and other personal taxes that may be payable to the appropriate authorities.

HOW TO INVEST AND BECOME A SHAREHOLDER?

Providing you and/or your organisation are/is a qualified investor, you can express your interest by registering here. However, you are still welcome to register by joining the property community, even if your current status is not as a qualified investor. You will benefit by accessing information regarding property market opportunities, boosting your knowledge in the commercial and residential real estate sectors, exploring property investment and development areas, booking events and viewing many other features, including an ability to leave comments in our blog. Your personal or other organisation’s status may change as you or your company gain eligible investor status in the near future.

After the verification process, you will be able to view the Projects and Shareholding Process sections and real estate portfolios in detail. When you are verified as a qualified investor as part of the required legal procedure referred to as the “Know Your Client” (KYC) process, you will also be provided with further information packs relating to your choice of projects to complete your subscription based on your preferences.

WHY SHAREHOLDERS' CAPITAL FUNDRAISING IS MORE POWERFUL THAN BORROWING?

Given the restrictions in domestic lending, the property projects should be private equity backed to acquire strategic land and potential sites to add value. Together we are able to do more than anyone else alone for large valued real estate assets – known as economies of scale: shouldering more risks, driving greater efficiency, building more homes and commercial spaces, creating beautiful new places and sustainable, independent communities.

Therefore, international funding, especially from overseas private equity finance, corporations, investors and high-net-worth individuals (HNWI) becomes a favourable prospect for our property development and investment activities. We ensure that every potential project has adequate funding capabilities to acquire, develop and support the assets, without approaching debt resources from banks in the first instance.

Likewise, we are open to seeking joint ventures and funding partnership arrangements from international investors and private equity funds. We welcome strategic shareholders into our real estate structures.

WHY ARE SHAREHOLDING OPPORTUNITIES BETTER WITH PROPERTY CHARACTER?

In the current climate, anyone interested in real estate, either in land or buildings, can hardly afford to invest in complex property related matters without proper due diligence so as to mitigate the risk of possible loss of profit or investment. Today, it is vital to be backed up by property professionals. Property Character with its qualified Chartered Surveyors and Valuers have over 10 years of property development and investment advisory experience with both residential and commercial market knowledge.

Initially, our team will prepare a detailed property strategy and investment appraisal, with capital requirements and required return, reflecting the investment perception of the project’s risks. As Chartered Surveyors, we possess a thorough understanding of the property market and complex legal and tax implications in order to maximise investors’ wealth and shareholders’ value. We will establish the right corporate and legally independent entity, allowing the new capital structure to be consolidated financially through value creation mechanisms, both from debt and private equity sources.

WHAT IS THE ROLE OF PROPERTY CHARACTER AND SHAREHOLDERS IN THE PROPERTY PROJECTS?

Property Character administrates the current website. Also Property Character has a separate and independent branch of certified and qualified Chartered Surveyors with compliance procedures which will serve as an operator and/or a nominee to the SPV and will provide property management, professional services and specific property advices to the SPV or investors without conflict of interest on an “if and when needed” basis.

In most cases whilst acquiring real estate assets, Property Character is deemed to act with any SPVs as a proxy and a legal owner of the properties. However, the shareholders retain the beneficiary ownership of the real estate assets. The particular arrangements are stipulated in each Article of Association. Property Character’s principal position is to provide administrative and management functions on behalf of shareholders and the SPVs in relation to the purchase, required professional and technical services, refurbishment and maintenance of real estate assets, planning and development related activities, rent reviews and tenant supervision, sale of the properties and to co-ordinate and facilitate the payment and collection of rents and sums due under or in connection with the SPVs.

The shareholders retain complete control over decision-making and discretion over whether or not to make an investment and on what terms and over all other aspects of participation in investments made through Property Character. Nothing Property Character does and nothing on the website is intended to conduct or be construed as advice or recommendation by Property Character to enter into a particular investment project.

WHY IS A CORPORATE VEHICLE NEEDED TO ACQUIRE ASSETS OR RAISE FINANCE?

There are two main reasons why investors are prone to acquiring single shares. They are evenly divided in a corporate vehicle which acquires the property as an ‘indirect investment’ rather than purchasing the property directly:

Firstly – the entrance price barrier to acquire a whole single property asset for one investor as a direct investment, especially in London, can be quite costly. Therefore, acquiring a share in an SPV / PropCo as an indirect investment will give an investor the same effect but a quicker access to build up the ownership in various classes of property assets in London along with the same minded investors who do not have enough funds or to place them only into one property asset.

Secondly – spreading the risks via property development, commercial and residential investments, and especially ‘hedging’ the risks via various classes of assets. Please visit the Projects section explaining various project entrance opportunities.

Whether investors have an aim to acquire a new interest or raise finance for existing real estate, Property Character helps in creating and structuring a funding vehicle, either inside or outside the UK, for example for international clients. We separately register investors via our website and provide them with information on properties which, should they choose to do so, will be available for them to invest in by acquiring shares or loan notes in a corporate vehicle known as a Special Purpose Vehicle (SPV) being a Property Company (PropCo). An SPV in most cases is a UK-incorporated Limited Company (Ltd) specifically set up for the purpose of purchasing the property.

Generally, shareholders are happy to engage in an SPV / PropCo formation based on a Limited Company (Ltd) structure. However, some financial institutions and international investors due to their tax exemption status and/or other circumstances prefer a Limited Liability Partnership (LLP) structure to the former one. From our prospective we always give a choice to potential shareholders of entering either into Ltd or LLP legal corporate vehicle.

HOW IS ADDITIONAL VALUE CREATED VIA OUR PROPERTY PROJECTS?

Property Character welcomes investment professionals, sophisticated investors and high net worth individuals (HNWI), subject to passing legal compliance, to participate in real estate investment assets as shareholders of the specially created UK or European legal entities, to benefit from both income rewards paid through yearly dividends, as well as capital appreciation once the property is sold.

Our ‘value-created’ approach is formed of sharing ‘income and growth’ returns with the following aims:

– Research supported transactions, comparable evidence based on our UK and Europe-wide investment and asset management expertise;

– Acquiring under-valued assets and adding value through development / refurbishment actions and realisation of client specific requirements, as well as via unequivocal emphasis on income and capital enrichment with long term compound resulting cashflow;

– Pro-active asset management performance with specific quarterly assessment vs business plan focused for each property asset;

– Annual monitoring of IRR forecasts with annual hold / divestment control through well timed exit market strategy with appropriate sales to secure required outcomes.

DOES PROPERTY CHARACTER PROVIDE INVESTMENT MANAGEMENT?

Not at all. Property Character is not authorised by the FCA. We do not provide any advice on investment and we do not provide general or specific investment management. We will, however, provide administrative assistance in bringing qualified investors together and providing the necessary documentation to provide them with evidence of their investment in a PropCo and/or an SPV. We will also be responsible for the supervision, property management and operation activities and the development of real estate assets.

Any decision to invest in a PropCo and/or an SPV advertised on our website is solely the investors’ own and they must only do so after seeking their own independent advice.

WHAT PROPERTY SUPPORT IS AVAILABLE FROM US?

Our support team is devoted to providing registered users with as much information as possible for their current and potential investment projects. We also provide all users with an Account Page, where the investor’s section may include more extended information such as annual valuation and financial reports, project and market updates, videos and photos, and relevant legal documents for each investment.

Under stipulated obligations to each SPV, Property Character’s independent Chartered Surveyors’ arm provides investors with all necessary property advisory, regular asset valuation, supervision and management services both in the pre-acquisition (including conveyancing, legal and/or architectural reports) and post-acquisition stages (including property management) until the divestment of the property assets in order to assist shareholders in making an informed investment decision.

However, the investors are solely responsible for conducting any legal, accounting or other due diligence review and should obtain investment and tax advice from their advisers before deciding to invest. Our support team does not make any recommendations, solicit any offers to buy or sell any shares, or provide any investment advice.

CAN INTERNATIONAL INVESTORS BECOME SHAREHOLDERS IN THE PROPERTY PROJECTS?

In most cases, yes. Anyone, subject to ‘legal hurdles’, can buy properties anywhere in the world. However, it is the responsibility of any international investors wishing to participate in our projects to inform themselves as to the full observance of the laws and regulatory requirements of the relevant jurisdiction, including the obtaining of any governmental, exchange control or other consents which may be required and the compliance with other necessary formalities in such jurisdiction.

For more details please see our Terms & Conditions section.

WHAT PROPERTY DEVELOPMENT AND INVESTMENT RETURNS CAN BE ANTICIPATED?

Exact future financial returns cannot ever be guaranteed by anyone. Property Character provides shareholders only with return assumption in the investment prospectus for each SPV and/or acquired property assets as close as possible based upon various property market analysis, comparisons, valuations and other myriads of due-diligence factors. The shareholders agreeing to invest in accordance with the information pack provided must be prepared for any investment loss. Any examples of returns in our website are our own property market analyses and solely for illustrative purposes and should not be construed as an exact predictor of future performance. They are intended to assist in decision-making and are not a guarantee of investment outcomes.

Property Character can only classify the probability of returns without any assurance as follows:

– Income from the loan instrument notes (highest probability with fixed yearly return rate);

– Income from property investment projects (medium probability, subject to lease agreements and payable rents within the defined periods);

– Capital gains from both property development and investment projects (low probability but with potentially higher capital rewards subject to future profitable assets’ realisation, market demand and performance).

CAN THE PROPERTY PROJECTS BE GEARED OR LEVERAGED?

The real estate market is cyclical, as is the economy. Therefore, gearing or leverage can be successfully implemented but is also dependent on economic conditions and can be very dangerous. The past economic crisis ultimately had a serious effect on real estate prices and returns, especially when the lending institutions’ interest rates were uncertain and dependent on the Central Bank’s monetary policy.

To protect shareholders from any of these potential risks, Property Character does not envisage, at least at the start of a project, entering into any debts, thus prudently relying only on shareholders’ funds. However, later, subject to the shareholders’ decision to release funds from the current assets for other property projects, it may be possible to attract senior debt for the property development / construction and investment activities. On the other hand, in the later stages of a project when deciding upon leverage, Property Character would be also able to negotiate better borrowing terms and interest rates with financial institutions rather than in the early stages of a project.

Investment Risks, Valuations and Other Related Miscellaneous

WHAT RISKS MAY PROPERTY DEVELOPMENT AND INVESTMENT PROJECTS BEAR?

Potential investors should be aware that acquiring shares or loan notes in an SPV involves a high degree of risk and the SPVs’ business, financial condition or operations could be materially or adversely affected by the occurrence of any of the risks described below. In such a case, the value of the shares or loan notes could decline and investors could lose all or part of their investment, although it will be secured on the property purchased by the SPV. The following list does not purport to be an exhaustive list or summary of the risks the SPVs may encounter.

Property Investment and Development of any property carries execution and related operational risks. Unanticipated situations may arise (such as the presence of protected wildlife, inclement weather, insolvency affecting contractors, unforeseen ground conditions etc.) each of which may cause increased cost or delay or cause the project to fail in extreme circumstances.

Investors are dependent upon the realisation of the value of the property held by the SPV to get their money back and a return after the minimum holding period. The market value of properties can go down as well as up, and the SPV may not get back the amount it invested in the property. This will adversely affect the returns to investors.

Whilst steps such as implementing professional surveys and conveyancing for the property will be taken, there may be hidden defects in it which are not apparent or identified and which may later affect the property’s ultimate sale price. The SPVs may, depending upon market conditions, find it difficult or impossible to sell the property in the timescales or at the prices envisaged.

A more detailed observation of possible risks is given in the investment memorandum.

HOW HAVE THE PROPERTY ASSETS BEEN CONSTANTLY VALUED?

Property valuation is the most important indicator of the value of the real estate. Property Character will never acquire any property asset without an official RICS professional valuation. Our independent Chartered Surveyors arm is entitled to carry out and produce RICS valuation reports. However, we can also use a third party of RICS valuers depending on the price coverage of Professional Indemnity Insurance (PII) and potential conflict of interests involved.

We envisage the following RICS property asset valuation:

– at the purchase (full market valuation),

– every year (desk top valuation) and

– every five years (full market valuation).

More valuation benefits and the procedure for setting the sale price per share for the shareholders involved from the formation stage is listed in the Shareholding Process section.

WHAT ARE THE TYPICAL FEES OF PROPERTY CHARACTER?

Property Character charges industry acceptable transaction fees as any other estate agents would envisage. We charge a one-off transaction fee of 2% at the point the shareholder’s capital is funded. This fee is not annually recurring and there is no charge on disposal. The 2% fee applies for new shareholders whether it is a new listing or resale transaction that investors are making.

Detailed information on all fees charged is specified in the information pack for each investment.

WHAT IS THE INVESTMENT SECURITY FOR ACQUIRED PROPERTY ASSETS?

Each real estate development and/or investment offered through Property Character is secured by the issuers’ equity interests in each SPV / PropCo with the underlying real estate assets. Prior to a formation, an SPV, investors’ funds are held in a solicitor’s account until the legal entity is formed and exchanged for a share certificate. Shareholders have complete control over the decision-making for each SPV, assets’ acquisition and following resolutions. This ensures that shareholders’ capital is always secured by the actual real estate that investors are investing in.

IS PROPERTY CHARACTER REGULATORY COMPLIANT AND ETHICAL?

Yes. As members of the Royal Institute of Chartered Surveyors (RICS) we have compliance and ethics standards and therefore, any complaint is a matter of importance. Following the correct legal procedures and being ethically responsible is at the heart of what it means for us to be RICS qualified and that is what distinguishes Property Character as professionals and highly respected experts from others in the marketplace.

As property certified professionals, we adhere to the following guidelines in all our real estate development and investment activities and commit to:

– Act with integrity

– Always provide a high standard of service

– Act in a way that promotes trust in the profession

– Treat others with respect

– Take responsibility