Frequently Asked Questions
What is Strategic Land?
Normally greenfield land, which is undeveloped land and as such does not have planning permission. It can be in a town or rurally located. Current uses are for agriculture or open space. It is vital that it has the potential to achieve planning permission in the medium to long term. This land will have the potential if there is the demand for housing, good transport links and nearby amenities.
Why invest in Strategic Land?
The capital uplift on greenfield sites to land, with planning for residential property, is far greater than that of conventional investments. Examples are given on a site by site basis in individual Information Memorandums.
What is the investment strategy?
The strategy for the Investor is to purchase a share in the Company, which is a Special Purpose Vehicle (SPVs – are widely used in the property development and construction industries. They are legal entities set up for a specific purpose to isolate risk.)
The Directors will then work to achieve residential planning permission on the land.
The Company will tender to sell the Company to property developers once planning permission has been successfully obtained.
How long will it take to obtain planning permission and sell the Company?
There is no guarantee that planning will be obtained.
The minimum time it will take to achieve planning permission and sale of the Company before the monies are returned to Investors is at least 3 years. However, this may take substantially longer, if complications are experienced this timeline may go above 10 years. The Company will always own the freehold of the land and this has an indicative value attached to it.
What are the risks investing in Strategic Land?
The attention of prospective Investors is drawn to the “RISK FACTORS” section in individual Information Memorandums. Other than the Company entering into liquidation, the time it takes and risk of not gaining planning are the biggest risk to the Investor.
Who can invest?
The shares are considered ‘non readily realisable securities’, which means they’re illiquid, difficult to price and don’t have a secondary market. This means they’re only suitable for certain types of Investor:
High Net Worth Investor – An individual who has signed, within the period of twelve months ending with the day on which communication is made, a statement to confirm they have an annual income of not less than £100,000, or net assets, excluding their primary residence, of not less than £250,000.
Certified Sophisticated Investor – An individual who has a written certificate within the last 36 months by an FCA Approved Person confirming that the Investor is sufficiently knowledgeable to understand the risks associated with engaging in investment activity in non-mainstream pooled investments
Self-Certified Sophisticated Investor – An individual who has signed, within the period of twelve months ending with the day on which communication is made, a statement to confirm that they have sufficient knowledge to understand the risks associated with engaging in investment activity in a non-mainstream pooled investment.
Under FCA regulations it is essential to verify all of our prospective Investors’ status prior to delivering any financial promotions or details of investment opportunities.
How do I invest?
Follow the link to investments, decide on the Company you wish to buy shares in. Complete the declaration of High Net Worth/Sophisticated Investor. Read the Information Memorandum (noting the risk warnings), the Company documentation and then complete the online application (or download the paper application). Once you have been verified you will be contacted by the receiving agent to make the payment.
What will I own after investing?
The Investors will own a share in the Company (Special Purpose Vehicle).
The Special Purpose Vehicle will own the land.
A share certificate will be issued following receipt of the investment and the Investor returning a signed deed of adherence.
Will I receive an income?
The Company does not anticipate paying dividends in the foreseeable future and, accordingly, Shareholders must not rely on dividend payments for any return on investment. Under English law, a Company can only pay cash dividends to the extent that it has distributable reserves and cash available for this purpose. The Company may not pay dividends if the Directors believe this would cause the Company to be inadequately capitalised or if, for any other reason, the Directors conclude it would not be in the best interests of the Company.
Can I trade my shares?
The shares are illiquid and your investment cannot normally be released or realised until the land is sold by the Company.
How do Investors complain?
The protections afforded by the Financial Services and Markets Act 2000 including recourse to the Financial Ombudsman Service and compensation entitlements under the Financial Services Compensation Scheme do not apply. All prospective Investors are strongly recommended to seek advice on the suitability of this investment. Please send any complaint in writing to The Director, MHL Strategic Land, 16-18 Watergate Street, Whitchurch, Shropshire, SY13 1DW
