WHAT IS MELT INVESTMENT?
MELT Investment is the investment arm of MELT, that offers the chance to participate in our rigorously vetted property development investment opportunities in residential, mixed-use, strategic land and asset-backed operating businesses, including aparthotels and hotels.
OUR INVESTMENT PHILOSOPHY
We actively seek out sites with strong potential for value enhancement through planning, but with an existing use or extant consent that puts a floor on minimum project returns. By targeting developments which meet these criteria, we ensure that our investment always makes a minimum acceptable level of return, while including significant potential for upside profit.
In order to deliver cost and programme certainty, we seek out projects which can be delivered using modular or another form of off-site construction. As modular technologies and delivery methods have started to mature and gain economies of scale, the projects to which they can viably be applied has broadened.
Building using modular construction enables the amount of waste generated by our projects to be reduced and the carbon embodied within developments to be minimised. Climate change will be far more costly to deal with in the future if it is neglected now. So we take the responsibility of being as environmentally sustainable as possible very seriously.
We also seek out projects that demonstrate expertise in combining technologies like ground source heating, solar/hydroelectric power generation and battery storage mature to produce carbon offsetting and energy-positive developments. The key for us is that the cost of implementing these technologies must pay for themselves. We call this Sustainable Sustainability – environmentally friendly developments that are delivered in an economically viable manner.
FIXED RETURN DEBT
INVESTOR CASE STUDIES
Since November 2017, we have crowdfunded over £2m from investors for our property development projects. We received a high level of interest from investors with the offer on our Cinderford project, filling in 18 hours and being over ten times oversubscribed.
On 22nd October 2018, we launched another investment offer. We held a launch party at M Club Victoria. Over £600K was invested on the first day. We hit £837K within a week of launch and closed the offer on 11th November with £1.13m raised from 45 investors. The offer was oversubscribed – a further £600K that we could not accommodate came in after the deal had closed.
At 4:00 pm on 7th July 2018, we launched an investment offer on 21-23 Market St, our development in Cinderford, Gloucestershire. By 10:00 am on Wednesday, we had over £300,000 of funds committed. When the offer closed, we had interest from investors with over £1.5m in funds.
OUR FOCUS ON THE APARTHOTEL SECTOR
Development for this sector is something that – structured correctly – can deliver deals, which tick the box for everyone involved – the developer, investor, and the end-user.
An Aparthotel is a blend of a traditional hotel and an apartment. Think serviced apartments at scale. The target market is largely the corporate crowd who travel for business, but it also appeals to guests travelling for leisure as well.
The growth in this sector is what makes this strategy hot. There are a number of operators who are growing quickly and can offer strong covenants to developers. One model is to lower overheads by stripping out space-consuming facilities such as gyms and restaurants.
The demand is strong, so occupancy is high, and investors like the model. A healthy market for tourism in London, as an example, and an offer that doesn’t directly compete with traditional hotels means consistent demand.
A lease to the right aparthotel operator can be entirely forward funded. Essentially this is an early sale to a pension fund or other large investor and then a contract for the developer to deliver the project to completion on behalf of the buyer.
Funds are hungry for investments of this type. Forward funding or backing an operator directly are ways in which they can secure a pipeline of deals at an early stage. From a developer’s perspective, this delivers a level of certainty that simply is not available with residential deals.
MELT Property explained the whole investment process from start to finish. It was easy and straightforward to invest in this project. I looked at their previous projects and knew that my investment was in safe hands and it was. I’m also happy with their clear and consistent communication throughout the project.
Investor Disclosure Notice
Please note that property investments involve risks including loss of capital, illiquidity, default of a borrower, and lack of returns. The risks involved vary by project type, so please make sure you have read and understood the specific risks associated with an investment. Projections or estimated returns are not a reliable indicator of actual future performance and eventual returns or dividends may be lower than predicted. Information presented on this website is for guidance purposes only and does not constitute financial advice. If you are unsure of the suitability of property investments for you, please contact your financial advisor for professional advice.