2. Executive Summary
The Team
The Opportunity
The vision for Duke Street Apartments (DSA) is to purchase, renovate, furnish and short term let prime
residential properties initially in Central Edinburgh. DSA will use e-commerce platforms to market the
properties and will provide a high quality management and concierge services in order to generate an
above average yield and maximise long term capital value appreciation.
Neil Scott Johnson (NSJ) BLE MRICS is an experienced Chartered Surveyor with his own
residential portfolio and has worked in both London and Edinburgh. His developments
include the award winning Brighton Jubilee Street, Leeds Cloth Hall Street and BREEAM
excellent Ratho Park Business Park, Advisers for the venture to include Legal: Rooney
Nimmo and DNS Accountant.
There are limited opportunities to invest in a tax efficient Corporate structure that takes advantage of the
high yielding short term let market in Edinburgh and concentrates on prime residential properties in City
centre “hotspots”.
The Solution
DSA will set up a management/holding Company to service individual SPV's set up to own each of the
properties purchased. NSJ will have a shareholding in each of the SPV's and will personally manage the
setting up of the venture, property identification and acquisition, refurbishment, marketing, active
property management (while being short term let) and eventual disposal of the properties.
Benefits of SPV Corporate Structure:
l UK Corporation Tax to decline to 17% by 2020.
l Potential for Substantial Shareholding Exemption.
l Potential for Entrepreneurs relief on capital gains.
l Dividend tax management for shareholders.
l SPV's gross annual income will be below the VAT threshold.
l Finance and mortgage costs can be deducted from income as a normal expense.
l Pension contributions can be deducted from Corporation tax.
SPV2
Property 2
DSA
Holdings/Management
Company
SPV1
ETON
SPV7
Property 7
2 I Business Plan
Duke Street Apartments
Pomona, Edinburgh Road,
Belhaven EH42 1NS
Contact- Neil S Johnson
07771 802 866
neil@dukestreetgroup.com
3. l Scotland number 2 country to visit in the world: Rough Guide 2017.
Edinburgh
l 'Best Mid-Sized European City' and 'Best Mid-Sized European City'
(Financial Times fDi Magazine 2014)
l Highest number of visitors and restaurant per head in the UK except London
l 'Best Place to Live in the UK' 2014-16 (Telegraph)
1.54m
International visitors in 2015
growing at 4%
Prime Residential Growth
Projections in 2017 and
2018 (Savills)
3.5% 4%&82%
Hotel occupancy
with ADR £88
3 I Business Plan
Duke Street Apartments
Pomona, Edinburgh Road,
Belhaven EH42 1NS
Contact- Neil S Johnson
07771 802 866
neil@dukestreetgroup.com
4. Occupancy Rate Last Twelve Months(LMT)
Property Occupancy percentile
OccupancyRate
0%
25%
50%
75%
100%
10 th Percentile 20 30 40 50 60 70 80 90 th Percentile
14%
25%
34%
44%
53%
62%
71%
81%
92%
1st Property purchase
Eton Airbnb
This property is owned by NSJ and will be
purchased by DSA following valuation. NSJ
to use equity released to fund stake in DSA.
Gross Income since 4 July 2016-to end Dec
16- circa £20k. Airbnb 5-star status and 30
reviews.
£124
Average ADR for
2/bedroom
84%
Occupancy
at 75percentile
£71
Avg. Revenue per
available room
4,930
AirBnB listing in
Edinburgh
AirBnB
Edinburgh
Shared Room
Private Room
Studio
1 Bedroom
3 Bedroom
2 Bedroom
4+ Bedroom
$33
$51
$108
$116
$147
$232
$405
Average Daily Rate
Average Daily Rate
4 I Business Plan
Duke Street Apartments
Pomona, Edinburgh Road,
Belhaven EH42 1NS
Contact- Neil S Johnson
07771 802 866
neil@dukestreetgroup.com
5. Investment Criteria
l Geographical search area Edinburgh New Town, Stockbridge and City Centre.
l Target hold period 7 years.
l Properties purchased 7-8 (average lot size £475-540k)
l DSA requires £1,100,000 from investors
Regulation in congested Central London, restrict's some landlords to 90 days pa of short term rentals.
Edinburgh has a different housing demographic and a shortage of hotel rooms. DSA will obtain consent from
City of Edinburgh Council to change the use of the properties to "self catering" commercial use.
l DSA has a cornerstone investor investing up to £250,000.
l Minimum individual investment £75,000 per property.
l Portfolio size - £3,800,000
l Investor benefits- Investors will receive a 15% discount when occupying DSA properties.
l Debt provision £2,700,000.
Requirement
Regulation
DSA is not a regulated vehicle and investors are required to carry out their own risk assessment.
Disclaimer
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7
Net income
post cost and
interest (£)
4,200 60,550 111,700 126,300 139,850 154,200 169,450
Cumulative
return on
equity.(%)
0.1 7.3 9.7 11.0 12.1 13.4 14.7
IRR 15.3%
5 I Business Plan
Duke Street Apartments
Pomona, Edinburgh Road,
Belhaven EH42 1NS
Contact- Neil S Johnson
07771 802 866
neil@dukestreetgroup.com
6. Contact- Neil S Johnson
07771 802 866
neil@dukestreetgroup.com
Duke Street Apartments
Pomona, Edinburgh Road,
Belhaven EH42 1NS
