British Pearl expects to complete on the sale of its portfolio in February but has said that investors with equity in the properties are unlikely to get all their capital back due to falling prices.
The property investment platform was launched in 2018, backed by former Conservative Party treasurer Lord Stanley Fink, and lets investors fund property developments through either a loan or equity. Its portfolio was listed for sale with online agent Vesta Property in April to preserve its value.
A buyer has now been found, so British Pearl has closed its secondary market and has continued to let interest and dividend payments accrue, rather than repay investors, until the sale completes. “In October we came to an agreement with a credible buyer who will be buying the entire portfolio as a single transaction,” Ali Celiker, founder of British Pearl, said. “Consequently, the resale market has been suspended. “The transaction is currently with lawyers and we expect the purchase to be complete by the end of February.”
Based on the current terms of the purchase, Celiker said loan investors should expect to recoup their original principal investment including accrued interest. Investors with shares in the properties should not expect to receive their original investment capital in full “owing to the softening of achievable property prices, transaction costs and leverage,” Celiker said.
“At this stage it is difficult to determine the final share price since all expenses and accrued returns are unclear,” he added.
British Pearl is still seeking new investments and Celiker said the platform will not be closing down. “The board remains convinced that the sale of our property portfolio is the correct response to current real estate market conditions,” Celiker added. “We have continued, as in previous months, to manage the portfolio prudently towards the best achievable exit for investors by seeking to ensure that all special purpose vehicles are solvent, occupied and well maintained.”