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THE REGAL GREEN

HOMES BOND

INFORMATION MEMORANDUM
Real Estate Associates (GP) plc
Information Memorandum
In connection with the issue of up to 10.0 million of

Secured Series 3 Bonds due 5th April 2020


(Minimum Subscription: 5,000 and then in 1,000 increments)
ISIN GB00BVGH8856
SEDOL BVGH885
Desc: 6.75% BDS 05/04/20 GBP5000

Information Memorandum issued by


Real Estate Associates Limited (the Arranger)
Authorised and regulated
by the Financial Conduct Authority

Contents
Notice to Investors

Investment Summary

Definitions and Terms

Parties and Advisers

Introduction

Company Background

Investment Backdrop

The Asset Manager

10

Project Pipeline

11

Financial Information on the Asset Manager

12

The Limited Partnership

13

The Company

14

The Arranger

16

Bond Offer

17

Security

18

Intermediary Commissions

20

Disposal in the event of Bondholders critical illness or death

20

Reporting

20

Conflicts of Interests

20

Risk Factors

21

UK Taxation of Bondholders

23

Application Procedures

24

Money Laundering Regulations

24

Appendix: Bond Series 3 Principal Terms

25

Contact Details

26

Notice to Investors
The Directors of Real Estate Associates (GP) plc (the Company) accept responsibility for the information contained in
this Information Memorandum (Memorandum). To the best of the knowledge and belief of the Directors (who have
taken all reasonable care to ensure that such is the case) the information contained in this Memorandum is in accordance
with the facts and does not omit anything likely to affect the import of such information. The Directors accept
responsibility accordingly.
This Memorandum relates to an offer to subscribe for Bonds (Bonds) issued by the Company. The Company will not be
regulated in the United Kingdom.
As the Bonds are non-transferable, no secondary market will develop in them.
The Bonds will be issued only on the basis of the information and representations contained in this Memorandum. Any
purchase made by any person on the basis of statements or representations not contained herein or inconsistent with
information contained herein shall be solely at the risk of the purchaser.
Neither delivery of this Memorandum nor anything stated herein should be taken to imply that any information contained
herein is correct at any time subsequent to the date hereof.
Law in certain countries restricts the distribution of this Memorandum. Persons into whose possession this Memorandum
may come are required to inform themselves of and to observe any such restrictions. This Memorandum does not constitute
an offer or solicitation to any person in any jurisdiction in which such an offer or solicitation is not authorised or to any
person to whom it is unlawful to make such offer or solicitation.
The following restrictions should be noted in particular:

United Kingdom
The Bonds are non-transferable. Accordingly, there is no requirement under section 85 of the Financial Services and
Markets Act 2000 (the Act) for an approved prospectus to be made available to the public before any offer of the Bonds
is made in the United Kingdom. This Memorandum is not an approved prospectus and has not been approved by the
Financial Conduct Authority (FCA) or any other regulatory body.
Real Estate Associates Ltd, which is authorised and regulated by the FCA, has approved this Memorandum and issued it
in the United Kingdom to persons generally. However, applications for the Bonds will be accepted only in respect of the
following persons:

Page 4 | NOTICE TO INVESTORS

a) pension funds, the management companies of pension funds and other eligible counterparties (as defined in the FCAs
rules);
b) persons for whom the Bonds have been assessed as suitable investments by a person authorised by the FCA;
c) persons who are certified (including by self-certification) as high net worth or sophisticated investors (as defined in
the FCAs rules); and
d) persons who confirm that they will not invest more than 10% of their net investible assets in the Bonds or similar
products (defined as certified restricted investors in the FCAs rules).
Persons in categories c) and d) above will also need to demonstrate, before their applications can be accepted, that they
have the knowledge or experience to understand the risks involved.
Investors in the Bonds should note that they will not have the benefit of the Financial Services Compensation Scheme in
the event of the insolvency of the Company.

United States
The Bonds have not been, and will not be, registered under the Securities Act of 1933, as amended (the Securities Act)
or the securities laws of any of the states of the United States. Accordingly, the Bonds may not be offered or sold directly
or indirectly in the United States or to or for the account or benefit of any US Person except pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the Securities Act and any applicable securities
laws.
The Directors have however determined that the Bonds may not be offered, sold or transferred, directly or indirectly, in
the United States or for the benefit of any US Person. Each purchaser of Bonds shall therefore be asked to certify that
they are not a US Person, are not receiving the Bonds in the United States, and are not acquiring the Bonds for the account
of a US Person.
In this Memorandum, US Person means a citizen or resident of the United States, a corporation, partnership or other
entity created or organised in or under the law of any of the United States, or any person falling within the definition of
the term US Person under Regulation S promulgated under the Securities Act.

General
The Bonds are non-transferable and not traded on an exchange. It will therefore be impossible for an investor to dispose
of his Bonds before the redemption date, unless the Company chooses to redeem at an earlier date.
Prospective investors should inform themselves as to the legal requirements and tax consequences relevant to their
particular circumstances for the acquisition, holding or disposal of Bonds and any foreign exchange restrictions, which
may be relevant to them.
Bonds that are acquired by persons not entitled to hold them in accordance with the provisions contained herein may be
compulsorily redeemed at the Companys sole discretion.
Copies of the current articles of association of the Company are available at the registered office of the Company and
copies may be obtained on request by writing to the Company at its registered office. Potential investors are advised to
read the articles of association of the Company prior to any investment in Bonds.
Copies of this document may be obtained from the offices of Real Estate Associates Ltd.
Investment in the Bonds carries substantial risk. There can be no assurance that the Companys investment objective
will be achieved and investment results of the Company may vary substantially over time. This may affect the
Companys ability to pay interest on the Bonds and to redeem them at maturity, and investors may therefore suffer
a partial or complete loss of their investment in the Bonds. Investment in the Bonds is not intended to be a complete
investment programme for any investor. Prospective investors should consider carefully whether an investment in
the Bonds is appropriate for them in light of their circumstances and financial resources, and should review carefully
this Memorandum with particular attention to the section entitled Risk Factors. Prospective investors are also
urged to seek independent investment, legal and tax advice concerning the contents of this Memorandum and the
consequences of investing in the Bonds.
(Issued 10th April 2015)

NOTICE TO INVESTORS | Page 5

Investment Summary
This summary should be read in conjunction with, and in the context of, this Memorandum as a whole.

Bond Terms
Company

Real Estate Associates (GP) plc (incorporated in England and Wales).

Purpose

To provide investment and working capital to the Company principally in respect of financing proposed
residential property developments.

Denomination

Up to 10,000 Bonds Series 1 at an issue price of 1,000.00 each.

Minimum Subscription

5,000 and then in increments of 1,000.

Security

Registered charge over the Companys and the Asset Managers specified assets. The issue of new Bonds
is subject to the Companys total borrowings including the Bonds when issued not exceeding 85% of the
value of the Companys gross assets held as security for the Bonds.

Term

Until the Repayment Date of 5th April 2020 unless repaid earlier. Earlier repayment may be any time at
the Companys discretion. The Bonds are not transferable.

Interest

6.75% per annum accruing from the date each Bond is issued, payable semi-annually in arrears in April and
October each year.

Repayment

The principal of each Bond will be repayable on 5th April 2020.

Further details of the terms attaching to the Bonds are set out at page 25.

Closing Dates (initial offer)


Applications will be admitted on the first day of each calendar month following receipt, until the offer is fully subscribed
or the offer is declared closed earlier at the Companys discretion.

Contact Details
For prospective Bondholders & advisers
All enquiries relating to this information
memorandum may be directed to The Asset
Managers marketing department in the first
instance:
Regal Green Homes Ltd
The Hub Business Centre
35 Sherwood Street
Market Warsop
Nottinghamshire
NG20 0JR
Telephone: +44(0)1623 840909
Email: info@regalbond.com
Enquiries relating to the developments can be
directed to:
Regal Green Homes Ltd
Unit 19 Piper Business Centre
220 Vale Road
Tonbridge TN9 1SP
Telephone: 01732 759430
Email: info@regalbs.co.uk

Page 6 | INVESTMENT SUMMARY

All enquiries relating to previously submitted


applications may be addressed to The Arranger:
Real Estate Associates Ltd
3 Minster Court
Mincing Lane
London EC3R 7DD
Telephone: +44(0)20 7220 7180
Email: mail@realestateassociates.co.uk

Definition & Terms


In this document these expressions and abbreviations have the following meanings unless the context otherwise requires.
Arranger or REAL

Real Estate Associates Limited which was incorporated in England and Wales on 1 October
2002 under the Companies Act 1985 and which is regulated by the Financial Conduct Authority

Bonds

The Bonds whose principal terms are described on page 25

Bondholder

A person whose name is entered and appears in the register as a holder of any Bonds

Charged Assets

The Companys loan to the LP plus the net assets from time to time of the Asset Manager

Company

Real Estate Associates (GP) plc, registered in England & Wales on 11 August 2003 no. 04862610,
Registered Office 130 Western Avenue, Buckingham MK18 1LS

Final Repayment Date

The date the principal amount of the Bonds is due to be repaid being 5th April 2020

Limited Partnership or LP

Partnership Land LP, registered in England & Wales on 10 December 2009 no. LP013713,
Registered Office 3 Minster Court, Mincing Lane, London EC3R 7DD

Parties & Advisers


Bond Issuer

Real Estate Associates (GP) plc, 3 Minster Court, Mincing Lane, London, EC3R 7DD

Asset Manager

Regal Green Homes Ltd, Unit 19 Pipers Business Centre, 220 Vale Road, Tonbridge, TN9 1SP

Arranger & Security Trustee

Real Estate Associates Ltd, 3 Minster Court, Mincing Lane, London, EC3R7DD

Solicitors as to Bond Offer

Lewis Silkin LLP,5 Chancery Lane, Cliffords Inn, London, EC4A 1BL

Auditor

Ross Brooke Chartered Accountants, 2 Old Bath Road, Newbury, Berkshire. RG14 1QL

Bondholder Representative

CX Wealth Ltd, 9 The Shrubberies, George Lane, London, E18 1BD

DEFINITION & TERMS | PARTIES & ADVISERS | Page 7

Introduction

he Company is the general partner of Partnership Land LP, an English


Limited Partnership established under the Limited Partnerships Act
1907. The LP acting by the Company has appointed Regal Green
Homes Ltd as Asset Manager to identify, negotiate, acquire, develop and sell
residential projects in South-East England.
Regal Green Homes Ltd is an active residential developer in South-East England.
The Asset Manager identifies sites with existing planning consent principally for
modestly-priced flats and houses, manages the construction phase, and offers the
completed properties for sale to owner-occupiers on the open market. The Asset
Managers directors have gained extensive property development experience through
earlier projects by the Asset Manager and other entities including three projects now
completed with all dwellings sold, and a fourth project nearing completion. They
consider attractive opportunities are available to the LP taking advantage of forecast
continued growth in house prices in the region. On behalf of the LP, the Asset Manager
will target site acquisitions of modest size (generally with a gross development value
in the range 1.5m to 5m) which the Asset Manager considers will limit competition
by being too large for many private developers, while being too small for larger national
house-builders. According to the Asset Manager;
The chronic shortage of new houses in South-East England presents an opportunity to
earn a healthy profit, by building sustainable well-designed dwellings, while at the same
time meeting the aspirations of homeowners seeking the next rung of the housing ladder.
We continue to identify potential sites which may be too small for mainstream developers
yet too large for local builders, which fit the Regal Green Homes criteria and provide a
niche for the Limited Partnership to proceed.
According to the UK Land Registry, the average price of all property types in South-East
England (excluding Greater London) in January 2015 is 242,232, compared with the
national average in England & Wales of 179,492. The LP is aiming principally to provide
houses for purchase at or below this regional average, which the Asset Manager considers
will attract demand from the B and C1 demographic sectors including middle-managerial
and professional buyers, clerical workers, civil servants etc.
The LP does not intend to bear the risk and delays of securing planning permission on
unconsented sites so it will only acquire land with an existing financially viable planning
approval. It may seek to optimise an existing consent through changing details of the
design including appearance and density, before embarking on construction. Building
contracts generally will be let to a reputable main contractor on a fixed-price
arrangement following a tender or negotiation process; however the LP under the Asset
Managers advisement may also act as main contractor and employ sub-contractors
where significant savings are available. Normally, individual dwellings will be sold in
the open market at completion to owner-occupiers in order to maximise proceeds.
The Company expects to apply funding raised from this offering principally in making
an interest-bearing loan to the LP, enabling the LP to purchase land and finance
construction.
An investment in the Bonds is designed to provide 6.75% per annum interest
payable semi-annually in arrears, and at maturity the return of capital originally
invested. The Companys ability to meet these obligations is expected to be
funded through returns from the LP generated from profits on sales of completed
developments.
Returns will be secured by way of debentures over the Companys and Asset
Managers assets. Returns are not guaranteed.

Page 8 | INTRODUCTION

Company Background
Total Funding

The structure is summarised graphically below:

The maximum to be raised under the terms of this offer of Bonds


Series 3 of 1,000 each is 10m. The Company may launch
further series of Bonds, on the same or different terms, subject
to the criteria set out on page 19.

Series 3 Bondholders
Subscriptions

Interest & Repayment

Real Estate
Series 3 Bond re Regal The Companys other bonds
Green Homes
Associates (GP) plc
and other business activities

Structure
Bonds will be issued by the Company which is a public limited
company registered in England and Wales. The Company intends
to employ the proceeds of the Bond issue exclusively to meet
the costs of this offering and to finance the Limited Partnership.
The Limited Partnership comprises a convenient entity in which
to undertake property development activities, providing limited
liability, the ability to raise senior debt, separation of
governance from asset management, and tax transparent
treatment of returns at the LP level. Bondholders rights to
receive payments are secured by charges over the Limited
Partnerships specified assets, and by a debenture over the Asset
Managers assets, subject to any prior security.

Partnership Land LP

Limited Partnership

Investment

Advice Asset Manager


Regal Green
Homes Ltd

Profits

Development Projects

Investment Backdrop

arious commentators forecast growth in house prices in the medium term. For
example, in their February 2015 analysis, Savills forecast mainstream UK prices rising
19.3% in the period from 2015-19. Among their regional forecasts, South-East England
shows the highest projected growth over this period of 26.4%. Notably, London appears
lowest on their regional forecast with growth of only 10.4%. According to Savills, we expect
the South East to see the highest levels of house price growth over the next five years and
London the lowest, with buyers priced out of one moving to the other.
Generally in the UK, the level of strong house price growth over the last 12 to 18 months
has shown signs of easing, with Nationwide in September 2014 reporting the first fall in UK
average house prices in 16 months. The prospect of eventual interest rates rises, increased
mortgage controls and rising house price-to-income ratios is starting to moderate the speed
of increases. However in the Asset Managers view, economic recovery is likely to become
more widespread, and rate rises are unlikely to be severe enough to trigger a wholesale
housing market correction.
In the short-term the Asset Manager shares Knight Franks view that interest rate rises and
the risk of a renewed economic slowdown remain the biggest risks to the UK housing market.
Furthermore the Asset Manager considers that a softening in market confidence during 2015
surrounding the impact of the May 2015 General Election will present opportunities to acquire
suitable projects at keener prices.
Meanwhile there is little sign that the acute housing supply shortfall in South-East England
will be met by a sufficient increase in house-building. According to an October 2014 report
by the National Housing Federation, if current building levels continue the region will
face a housing shortfall of over 400,000 homes in the next 20 years, which is just under the
total number of households in Birmingham. The report notes that a rising demand for homes
and a lack of supply has caused the average house price in the region to reach almost
300,000, which is ten times the regions average annual salary.
The Asset Manager considers this backdrop of strong demand and limited supply, with
affordability constraints leading to a focus on lower-priced dwellings, present a sound
backdrop for the LPs investment plans.

COMPANY BACKGROUND | INVESTMENT BACKDROP | Page 9

The Asset Manager


Experience
The Asset Manager was established in 2011 and either directly or through related entities has completed the development
and sale of three developments in Gillingham and Maidstone, and is currently on-site with a development in Redhill,
Surrey. The Asset Manager is accredited by the National House Building Council (NHBC) and is an approved developer on
the Governments Help to Buy and New Buy schemes.
Jonathan Ward
Sales & Marketing Director;

Charlie Gallen
Operations Director;

co-founded the Asset Manager and has 30 years experience


in direct sales and marketing including extensive previous
achievement in property sales and marketing both in the UK
and overseas. A highly motivated negotiator, his role
includes communicating with industry professionals at all
levels, including handling negotiations for land acquisitions,
managing sales agents, coordinating the legal progress of
land and property purchases and sales, etc..

has extensive experience in the building and civil


engineering industry. He qualified as a civil engineering
technician in 1986 and later qualified as a Quantity
Surveyor. Before establishing the Asset Manager in 2011
he worked on various building projects for George Wimpey
including the 68 million Gyle shopping centre, Edinburgh.
He was also a project manager for Amec Construction on
Railtracks bridge replacement programme throughout
England and Wales, and a 6 million roof replacement
contract at London Victoria station.

Asset Managers Engagement & Remuneration

he Asset Manager is engaged by the LP under the terms of a management agreement for the duration of the
Bonds subject to providing specified services and subject to holding a nominal 1 equity participation in the LP.
The Asset Manager has granted the LP a right of first refusal over any potential project meeting the LPs
investment criteria but in the event the LP declines or is unable to proceed the Asset Manager will be entitled to
undertake the project on its own account, subject to satisfying the Company that it has sufficient financial and
management resources.

The Asset Manager will perform the specified


services without levying a periodic
management charge. Commencing 5th
April 2016 the Asset Manager will
accrue an entitlement to draw
profit share instalments not
exceeding
100,000
per
quarter.
Profits on the
completion of sales will be
applied first to pay any
interest or repayment due
to Bondholders; then to pay
the Asset Managers profit
share instalment including
any arrears. The remaining
profit at the Companys sole
discretion may be held in cash
or reinvested in further
projects. After the LP has
settled all sums due to creditors,
repaid any senior debt, and made
returns to the Company sufficient for
the Company to pay all interest and
repayment due to the Bondholders, all
remaining assets of the LP will be for the
Asset Managers account.

Page 10 | THE ASSET MANAGER

Project Pipeline
The directors of the Asset Manager have completed and sold the following projects within the Asset Manager and related
entities:

Toronto Road, Gillingham


Refurbishment of an existing 2-bedroom property with a new-build extension of 2 x 1-bedroom apartments.

Gross sale
proceeds
Land cost &
conveyancing
Construction cost

366,000
91,000
128,000

Agency fees

7,320

Legal sale fees

3,000

Total costs

229,320

Profit

136,680

Canning Street, Maidstone


New-build development of 7 x 3-bedroom townhouses, a 3-bedroom apartment and a 2-bedroom apartment.

Gross sale
proceeds
Land cost &
conveyancing
Construction cost

1,796,001

408,000
1,000,140

Agency fees

48,840

Legal sale fees

13,500

Total costs

1,470,480

Profit

325,521

Peel Street, Maidstone


New-build development of 2 x semi-detached 3-bedroom houses.
Gross sale
proceeds

393,999

Land cost &


conveyancing

152,000

Construction cost

156,450

Agency fees

5,910

Legal sale fees

3,000

Total costs
Profit

317,360
76,639

PROJECT PIPELINE | Page 11

Monson Road, Redhill


The Asset Manager is currently undertaking the following project which is programmed for completion in April 2015:
(Computer-generated image of completed development)
New-build development of 4 x 2-bedroom apartments and 2 x 1-bedroom apartments.
Anticipated
gross sale
proceeds
Land cost &
conveyancing
Construction &
miscellaneous
costs
Anticipated
agency & legal
fees
Total costs
Anticipated
profit

1,475,000

325,000

727,000

32,200
1,084,200
390,800

Financial Information on the Asset Manager


The Asset Manager is a private limited company established on 3 August 2011. The Companys unaudited balance sheet
as at 31 December 2014 was as follows:
FIXED ASSETS
Tangible Assets

12,420

CURRENT ASSETS
Construction in progress

850,000

Cash at bank and in hand

176,611

Debtors

40,690
1,067,301

CREDITORS
Amounts falling due within one year

(35,323)

NET CURRENT ASSETS

1,031,978

Fixed assets plus net current assets

1,044,398

Less Long term borrowings

(950,000)

TOTAL NET ASSETS

94,398

CAPITAL AND RESERVES


Called up share capital

100

Profit and loss account

94,298

SHAREHOLDERS FUNDS

94,398

The Asset Manager has agreed to create a fixed and floating charge over its assets by issuing a debenture to Real Estate
Associates Ltd holding it in trust for Bondholders, as described in more detail on page 18.

Page 12 | FINANCIAL INFORMATION ON THE ASSET MANAGER

The Limited Partnership

artnership Land LP was established under the Limited Partnerships Act 1907 on 10
December 2009 and has remained dormant until employed for the purposes of this
offering. It comprises a partnership between Regal Green Homes Ltd as sole limited
partner with a nominal 1.00 equity participation, with the Company as sole general partner
and Real Estate Associates Ltd as operator.
The arrangement presents a convenient tax-transparent structure within which to conduct
the property development activities, under the advisement of the Asset Manager and
subject to close supervision by the Company.
The LP will be used exclusively for the purpose of property development funded by the
Company under the advisement of the Asset Manager.
No additional equity participation in the LP will be issued except with the Security Trustees
approval. The Company currently does not envisage seeking such approval during the Term
of the Bonds.

THE LIMITED PARTNERSHIP | Page 13

Investment Process

he LP has engaged the Asset Manager to identify and administer projects meeting its business objectives.

The Asset Manager maintains close connections with a network of land sales agents and auctioneers and receives a steady
stream of potentially suitable development sites which it screens to identify opportunities which best suit the LPs business
model.
The Asset Managers Stage 1 site appraisal involves a desktop exercise including an assessment of the projects gross
development value, construction costs and any other associated expenditure including, for example, Section 106 planning
costs. If the development can achieve a 25% gross profit on cost (excluding contingency and finance costs) the Asset Manager
may proceed to the next stage.
The Stage 2 exercise includes a full site inspection and appraisal; preparation of a site and structural survey; scrutiny of
planning conditions and relevant building regulations; sales advice from local estate agents; and an architectural review
to examine the existing drawings and enhance where possible to reduce development costs and enhance profitability.
When satisfied with the development potential the Asset Manager will proceed with Stage 3, producing a recommendation
for the LP to proceed and if approved by the Company entering negotiations to acquire the site and put in hand arrangements
for construction.
Through its treasury role as the LPs general partner, the Company will control the application of finance raised by this
offer which will be remitted directly to solicitors acting in the acquisition of projects, and to relevant consultants and
contractors. Similarly the proceeds of sale will flow directly from the solicitors to the Company. These arrangements
represent a separation of treasury and asset management functions for the protection of Bondholders.
The Asset Manager has identified various residential development opportunities in South-East England, including sites in
Sidcup and Canterbury which (subject to detailed due diligence) meet the LPs investment criteria, and at the date of this
Memorandum is negotiating terms to secure the sites.
The Company will use the proceeds of the Bond issue to meet the costs of this offering and to provide finance to the LP.
The LP will pursue investment opportunities generally. At present, it is anticipated that these investment opportunities
will include one or more of the projects currently under negotiation. However, not all those developments may proceed.
The LP may also apply some of the finance to pre-development expenses in bringing forward similar residential developments
in the UK, either directly, through subsidiary vehicles, or in joint venture with other parties. The actual use to which the
proceeds of the Bond issue will be put will be determined by the directors of the Company from time to time in their
reasonable discretion having regard to the business strategy outlined in the Introduction.

The Company

he Company is a public limited company (originally established as a private limited company on 11 August 2003).
The directors of the Company and their holdings of the 50,000 issued shares are Ian Gerald Dowson (25,000) and
Alan John Bate (25,000).

Financing the Companys obligations to Bondholders


The Companys operational model has been devised to meet obligations to pay interest and to return principal to
Bondholders.
The Company expects the LP to achieve capital profits through the sale of the assets. It may realize such profits at an
early stage by off-plan sales during the development process, or later when the developments are complete.
The Company will also be seeking to boost the LPs asset value (and therefore increase Bondholders security) by identifying
future schemes to add to its development pipeline.
The Company has devised a cashflow management model which balances on one hand the availability of finance from a
range of permitted sources including the Bonds, revenues from the LP, any further bond issues and any senior debt; and
on the other with the funding required to service the Bond obligations. The Company is entitled to apply any of the LPs
finance to service the Bond obligations. Bond obligations will be serviced only by the Limited Partnerships returns.

Page 14 | INVESTMENT PROCESS | THE COMPANY

The principal assumptions adopted in the model include returns from the LP arising from developments producing 25%
gross profit on cost over an average 21-month project period. The summary below presents the conclusions:
Projected gross Limited Partnership profit after all payments due under the Bonds, prior to Asset Managers profit
share, as a proportion of Bond amount
2m of Series 3 Bonds

10m of Series 3 Bonds

31%

31%

The Company will maintain the financial model up-to-date during the Term and will present the projections to the treasury
committee quarterly. During the subscription period the Company will not accept any applications if either of the
indicators above is less than 10% (indicating that the Company may not be able to meet its obligations to Bondholders).
Costs incurred by the Company in respect of the Bonds include legal fees, marketing fees and commissions. The fees
and running costs have all been allowed in the financial model referred to above and can be paid by the Company ahead
of payments to Bondholders.
The liability of the Company to service the Bond obligations is limited to the amounts available from the LP.

Financial Information on the Company


The Companys balance sheet as at 31st October 2014 prior to re-registration as a public limited company was as follows:
CURRENT ASSETS
Debtors
Cash at bank and in hand

148,217
21,276
169,493

CREDITORS
Amounts falling due within one year
NET CURRENT ASSETS
Amounts falling due after more than
one year
NET ASSETS

(48,715)
120,778
(50,000)
70,778

CAPITAL AND RESERVES


Called up share capital

Profit and loss account

70,776

SHAREHOLDERS FUNDS

70,778

The Company undertakes a range of property management, accounting and administrative functions on its own account
and on behalf of clients. At the date of issue of this Memorandum the Companys sole borrowing comprises a private
loan of 50,000 and the Company has not issued any bonds nor borrowed any senior debt. The Company is currently
inviting subscriptions to earlier series 1 & 2 bonds to raise up to 8m for investment in other ventures, whose assets will
be available only to secure the interests of bondholders in those series.
The Company will levy an RPI-linked charge on the LP of 50,000 per annum and 25,000 at maturity plus VAT for its
services in administering the Bonds, for acting as general partner to the LP, and for procuring the services of Real Estate
Associates Ltd as Arranger and Security Trustee. Other costs incurred by the Company in respect of the Bonds include
legal fees, audit fees, and fees payable to CX Wealth Ltd for service acting as Bondholder representative on the treasury
committee. The fees and running costs can be paid by the Company ahead of payments to Bondholders.

THE COMPANY | Page 15

The Arranger

eal Estate Associates Limited is regulated by the Financial Conduct Authority, is


responsible for approving this Memorandum, and will provide general accounting, administration and governance services to the Company. It will also act as
Security Trustee for the benefit of Bondholders.
Real Estate Associates Limited was formed in 2002 by Ian Dowson and Alan Bate. Since
then it has launched and now operates over 20 investment schemes in the UK and
overseas. Participants include direct private investors, corporate investors and pension schemes ranging from SIPPs through to household name occupational schemes.
REAL also manages directly-owned property portfolios for UK and overseas investors.
Ian Dowson FCA, Managing Director, has a broad background in property investment,
management and development. Previously at Royal & Sun Alliance Property Investments Ltd where he was appointed managing director in 1999, his prior employment
included John Laing Construction plc and Laing Properties plc. He is a director of The
London Underwriting Centre Ltd and a Fellow of the Institute of Chartered Accountants of England and Wales.
Alan Bate BSc DipPropInv FRICS, Director, is responsible for product development,
performance modelling, property due-diligence and management, marketing and
investor relations. Moving from private practice at J P Sturge & Sons and Richard
Ellis, for Royal & Sun Alliance he managed a 1 million sq ft property development
programme and in 1994 he relocated to Toronto to run their Canadian property
subsidiary. Returning to the UK he was responsible for pension, unitised and
general funds, and property management of the entire 2.5bn UK portfolio. He
was a member of the British Property Federation's Policy Committee from 1999
to 2002, and from 2002 to 2008 a member of the Advisory Board for the College
of Estate Managements RICS Postgraduate Programme in Property Investment. He is a Fellow of the Royal Institution of Chartered Surveyors and a
member of the Investment Property Forum.
Real Estate Associates Limited will provide a director to the Companys
treasury committee. The first appointee is Ian Dowson.
The Arrangers and directors services are provided through a services
agreement with the Company.

Page 16 | THE ARRANGER

Bond Offer
Structure
The proceeds of this Bond offering will be employed by the Company principally in financing
the LP.
Funded by the LPs proceeds from onward sale of the projects, the Company expects to be
able to pay the Bond interest to Bondholders and repay the principal at maturity.
These arrangements have been devised so that Bond investors are able to gain exposure to
the opportunities presented by the Company, through a loan instrument intended to pay
an attractive rate of interest with return of the original sum invested at maturity on 5th
April 2020.
The terms of issue of Bonds Series 3 are set out in detail in the Appendix on page 25.

BOND OFFER | Page 17

Security
Payment obligations to Bondholders will be secured by charges over the Charged Assets. The Charged
Assets comprise i) the LPs property assets and any cash from time to time held by the LP; and ii) a
fixed and floating charge over the Asset Managers assets. The charges will be created by first or
second charges over the property assets recorded at the Land Registry, and by a debenture issued
by the Asset Manager registered against the Asset Managers record at Companies House. All
security arrangements will be registered to Real Estate Associates Ltd holding them in trust for
the Bondholders.
A treasury committee formulated by the Company and including Real Estate Associates Ltds
board appointee will meet periodically to review the Companys progress insofar as Bond
investors interests are concerned and will agree the timing and format of investor
communications. The treasury committee will assess the security value of the Charged
Assets no less frequently than quarterly, including active projects on the basis of cost
plus the proportion of expected profit on current-day sale prices. The issue of Bonds
is limited at the time of issue to an amount which when aggregated with the amount
of Bonds already in issue does not exceed 85% of the treasury committees most recent
assessment of the security value of the Charged Assets.
Subject to consent of the Security Trustee, the LP and the Asset Manager may each
create first charge security over its assets in favour of providers of senior debt
(for example should a bank provide a loan for a projects construction phase; or
where the LP wishes to offer security to facilitate a purchasers off-plan
acquisition). Such lenders typically may require a first charge over property
assets which will rank ahead of the Bondholders security. The LP will not
borrow more than 75% of the aggregate value of the LPs assets from senior
lenders.
Subject to consent of the Security Trustee and the holder of any first charge,
any properties may be sold from the portfolio prior to maturity of the Bonds.
After settling any sums due under the Bonds and any prior claims, the net
proceeds may be used to pay any profit share instalment to the Asset
Manager, or may be applied to reduce senior debt, make additional
purchases, or finance construction and pre-development expenditure.
Subject to consent of the Security Trustee, the Asset Manager may issue
bonds, loan notes or borrow senior debt on its own account. In considering
such consent the Security Trustee will have regard to maintaining
Bondholders interests.
The Asset Managers appointment by the LP is not exclusive, so the Company
will monitor its activities with particular regard to maintaining appropriate
security cover for Bondholders through the Asset Managers debenture. In
order to facilitate such monitoring, the Company will undertake a bookkeeping role for the Asset Manager throughout the term of the Bonds.

Through its role on the Companys board of directors and treasury committee,
Real Estate Associates Ltd will maintain an insight into the Companys and
the Asset Managers activities including progress with the developments and
sales, and will be entitled if necessary to instruct the Company to call an act
of default in the interests of Bondholders under the terms of the Bond.
In the event of a default being called under the terms of the Bond instrument,
the Bonds will become repayable in full ining the whole amount of principal and
unpaid interest. The Security Trustee will be entitled to exercise either or both
security arrangements created by the LPs property charges and Asset Managers
debenture, in its own discretion as to timing and priority, having regards to the
interests of Bondholders.
Attending and observing the treasury committee will be a Bondholder representative
nominated by Real Estate Associates Ltd in addition to the director appointed by Real
Estate Associates Ltd. The first representative will be CX Wealth Ltd, a design and
development consultancy for specialist property vehicles. Prior to founding CX Wealth
in 2011, Christopher Cauvain IMC spent over 25 years in the financial services sector with
major life assurance and investment companies including Scottish Life, Scottish006 he has
been focused on specialist property funds including two London residential funds, UK
commercial, student accommodation and funds in Poland, Germany and Italy. He is involved
in fund selection and research, product innovation and distribution of focused property funds,
having gained significant experience having worked with over 25 property funds. In his role as
Bondholder representative he will be available to consult with Bondholders and their advisers and
where necessary to consult with the Company on their behalf.

Page 18 | SECURITY

Through its role on the Companys board of directors and treasury committee, Real Estate Associates Ltd will maintain
an insight into the Companys and the Asset Managers activities including progress with the developments and sales,
and will be entitled if necessary to instruct the Company to call an act of default in the interests of Bondholders under
the terms of the Bond.
In the event of a default being called under the terms of the Bond instrument, the Bonds will become repayable in full
including the whole amount of principal and unpaid interest. The Security Trustee will be entitled to exercise either or
both security arrangements created by the LPs property charges and Asset Managers debenture, in its own discretion
as to timing and priority, having regards to the interests of Bondholders.
Attending and observing the treasury committee will be a Bondholder representative nominated by Real Estate Associates
Ltd in addition to the director appointed by Real Estate Associates Ltd. The first representative will be CX Wealth Ltd,
a design and development consultancy for specialist property vehicles. Prior to founding CX Wealth in 2011, Christopher
Cauvain IMC spent over 25 years in the financial services sector with major life assurance and investment companies
including Scottish Life and since, has been focused on specialist property funds including two London residential funds,
UK commercial, student accommodation and funds in Poland, Germany and Italy. He is involved in fund selection and
research, product innovation and distribution of focused property funds, having gained significant experience having
worked with over 25 property funds. In his role as Bondholder representative he will be available to consult with
Bondholders and their advisers and where necessary to consult with the Company on their behalf.

Other Series
This offer relates to Bonds Series 3 to raise up to 10m. The Company may;

i)

increase the 10m limit for Series 3;

ii)

reissue the Series 3 information memorandum on similar terms as to returns and security but with such amended
structure as required in the Companys view to respond to changes in the applicable legal, regulatory or tax
regimes;

iii)

issue other series of bonds on similar or different terms with a view to further investment in the LP;

iv)

issue other series of bonds on similar or different terms with a view to investment in business activities separate
from the LP; and

v)

issue other types of debt instruments or accept loans with a view to investment in business activities separate
from the LP;

subject to the treasury committee in its sole discretion approving the Companys proposals.
When exercising its discretion the treasury committee will have regard to the interests of existing Bondholders and will
require the Company to demonstrate reasonably that the changes will not adversely affect the prospects of existing
Bondholders receiving the advertised returns.
In respect of any further issuance under paragraphs iv) and v) above, the Company will not make security in respect of
those other offerings available to Series 3 Bondholders. The Company will endeavour to preserve the priority of payments
to Bonds Series 3 but in the event of a default or insolvency, any later series may however be deemed to rank in priority
to Bonds Series 3.

SECURITY | Page 19

Intermediary Commissions
Subject to the agreement of their client, regulated intermediaries may allocate a subscription commission from the gross
amount to be remitted with the application form. The Company will arrange payment of the subscription commission
as directed by the intermediary on the application form, before applying the net subscription to the Bonds.

Disposal in the event of Bondholders critical illness or death


Bonds are not transferable. Consequently prospective investors should not submit an application unless they are prepared
to hold the Bonds to maturity.
In the event of the critical illness or death of a Bondholder during the term, the Company is entitled to redeem some or
all of a holding early, at face value, at the Companys sole discretion and having regard to maintaining the Companys
solvency.

Reporting
Bondholders will receive by post their investment certificate and an annual report on the Companys activities. A
statement will be issued by post, e-mail or for download from a nominated website (at the Companys discretion)
coinciding with each interest distribution. The Company does not intend to convene any meetings of Bondholders. Any
meetings of the Bondholders will be at the invitation of the Company only.

Conflicts of Interests
The directors, the Arranger and other persons acting for the Company or the LP may from time to time act as director
of for or on behalf of or be otherwise involved in, other companies established by parties other than the Company which
may have similar objectives to those of the Company. In particular:

Christopher Cauvain is a director of the bondholder representative CX Wealth which may act as an agent and receive
fundraising commission from the Bonds and other investments;

Lewis Silkin are solicitors to the Arranger and to the Company on certain matters and may also act for other entities
with similar objectives;

the Company acts for the LP as general partner and provides book-keeping services to the Asset Manager;

the Arranger acts for the LP as operator;

the Company, the Arranger and their directors may organise and manage other entities with similar investment
objectives;
the Arranger and CX Wealth are shareholders of Funding Associates Ltd which offers fee-based
promotional and administrative services to the Company and other entities.

Any of them may, in the course of business, have potential conflicts of interest with the Company. Each will have regard
in such event to its obligations to the Company and will endeavour to make full disclosure of these conflicts and to use
best efforts to see that such conflicts are resolved fairly. In addition any of the foregoing may deal, as principal or agent,
with the Company, provided that such dealings are fully disclosed in advance and carried out as if effected on normal
commercial terms negotiated on an arms length basis.

Page 20 |

INTERMEDIARY COMMISSIONS | DISPOSAL IN EVENT OF BONDHOLDER DEATH | REPORTING | CONFLICTS OF INTEREST

Risk Factors
This section draws attention to the risks associated with an investment in the Bonds.

1.

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 and Bondholders are strongly recommended to seek advice on the suitability of
this investment.

2.

It may be difficult for Bondholders to obtain information relating to the value of their investment before maturity.

3.

There is and will be no established market for Bonds as the Bonds are not transferable and you should not invest
if you may need to realise your investment prematurely.

4.

Bondholders will need to hold their investment on a medium to long term basis. As a consequence, the Bonds are
not suitable for short term investment.

5.

Bondholders have no right or power to participate in the management of the Company.

6.

The ability of the Company to service the Bonds will depend on the financial performance of the LPs property
portfolio. In the event of default and the need to exercise the security, there may be insufficient funds to meet
the Companys obligations in respect of the Bonds.

7.

As with property values in general, the value of the properties can go down as well as up and Bondholders may not
get back the amount invested. No guarantees as to investment performance, interest payments, and return of
principal are given, either expressly or by implication, in this document.

8.

There is no guarantee that properties within the LPs acquisition criteria will be available for acquisition or that
the acquisition and development or refurbishment of properties can be completed within the budgeted cost, or
within the LPs available funding resources. The viability of developments may be affected by the absence, delay
or expenses in obtaining planning consents and other approvals; any shortfall in finance to complete construction
works; any delays or unforeseen additional costs in completing the works; etc..

RISK FACTORS | Page 21

9.

In the event that insufficient sales are completed or the sale prices are below target, it is possible that the LP may
be unable to meet its payment obligations to the Company which in turn may be unable to meet its payment
obligations under the Bonds. The LP or the Company may become liable to pay various outgoings including inter
alia insurance premiums, property taxes, utility costs, the cost of repairs, corporate taxes, corporate running costs,
the costs of liquidating the LP or the Company, etc.. After paying or making allowances for payment of these
outgoings the proceeds of selling the properties may be insufficient to meet the Bond interest and repayment of
the principal.

10.

The LP has no guarantee that purchasers for the properties will be identified in time for sales to be achieved prior
to maturity of the Bonds. In this event, there is unlikely to be sufficient capital to enable the LP to repay the
Company and in turn for the Company to repay the principal from its reserves alone. Such delays in achieving sales
may reduce or delay returns to Bondholders.

11.

Changes in market conditions during the Term may have an adverse impact on the LPs and the Company's
operational or exit strategies.

12.

Taxable Bondholders will be liable to taxation on the income and profits of the Bonds and will be required to meet
such liabilities from their own resources.

13.

The statements in this document relating to taxation are intended to be a brief description of some of the taxation
consequences of investment in a Bond. They do not apply to certain classes of Bondholders such as financial traders
which hold property as trading or to non-UK resident investors. Potential Bondholders should seek their own advice
on the taxation consequences of an investment in the Bonds because the Company, the Arranger and their advisers
take no responsibility in this regard.

14.

In the event that the Company is unable to meet its obligations in respect of the Bonds, the Bondholders do not
have rights of recourse to the LP nor to the Arranger and their advisers, directors and employees.

15.

The LP may create first charge security over its assets in favour of senior lenders. The Bondholders rights will
therefore be subordinate to the senior lenders. Accordingly after meeting its obligations to such lenders there is
no guarantee that the LP will be able to meet its payment obligations to the Company and in turn no guarantee
the Company will be able to meet its payment obligations in respect of the Bonds.

16.

The Asset Managers current and previous financing arrangements are devised to meet the Asset Managers
understanding of the prevailing regulatory and legal framework. Changes to the regulatory and legal framework
may expose the Asset Manager and its directors to potential redress by investors and the Financial Conduct Authority,
which could have an adverse impact on the Asset Managers ability to meet its obligations to the LP and Bondholders.

17.

The Company is entitled to issue further series of Bonds and other loan arrangements, on different terms. If the
Company should default and lose management control, all the assets attributable to all series may be pooled and
be subject to prior claims by preferred creditors. This may reduce the amount available to Bondholders subscribing
under the terms of this offer.

18.

The Companys fees and running costs will be paid ahead of distributions to Bondholders. Consequently in the
event of default these fees and running costs may reduce the amount available for distribution to Bondholders.

The Company's liability for amounts to service the Bonds Series 3 is limited to the amount available in respect of this
Series alone. The obligations of the Company in this regard are unsecured. In the event the Company becomes insolvent
the amounts payable to Bondholders may be deemed to be part of the Companys assets and therefore available equally
to all creditors, notwithstanding the priority payment rankings established by the Company

Page 22 | RISK FACTORS

UK Taxation of Bondholders
The comments below;
are of a general nature based on UK tax law and HM Revenue & Customs (HMRC) practice at the date of issue of
this Information Memorandum and are subject to change in such law or practice that may occur after such date,
possibly with retrospective effect;
relate only to persons who are the absolute beneficial owners of the Bonds and do not necessarily apply if the income
is deemed for tax purposes to be the income of a person other than the Bondholder;
may not apply to certain classes of persons such as dealers or certain professional investors; and
are not intended to be exhaustive.
The precise tax treatment of a Bondholder will depend on his individual circumstances and law and practice in force at
the relevant time and therefore may be subject to change. Prospective Bondholders are advised to consult their own
professional advisers before investing.
The Company will be obliged to withhold tax at the basic rate, currently 20%, on interest payments to Bondholders. The
Company will issue a tax certificate with each payment and will remit the tax withheld direct to HMRC. A Bondholder
who is subject to UK income tax at a rate not exceeding the basic rate should not be liable for additional income tax on
the interest earned on the Bond.
A Bondholder who is subject to UK income tax at rates exceeding the basic rate may be required to pay additional tax
after taking into account tax withheld at source by the Company.
A Bondholder who is not normally subject to tax in the United Kingdom may be entitled to claim repayment from HMRC
of the tax withheld at the basic rate by the Company.
A corporate Bondholder resident in the UK for corporation tax purposes will receive interest payments gross as there is
no withholding tax obligation; such Bondholder will have to pay tax on the interest received at the corporation tax rate
applicable to their profits and status. A charity resident in the UK for tax purposes will also be entitled to receive interest
gross.
A Bondholder which is a tax-exempt pension scheme constituted as a Self-Invested Personal Pension (SIPP) or Small
Self-Administered Scheme (SSAS) will receive interest payments gross as there is no withholding tax obligation.
No liability to UK Capital Gains Tax should arise on the issue of Bonds or on subsequent redemption. No UK Stamp Duty
or Stamp Duty Reserve Tax will be payable on the issue of Bonds or on redemption.
A holding of Bonds should form part of a Bondholders estate for inheritance tax purposes.
The Bonds are neither an Unregulated Collective Investment Scheme (UCIS) nor a Non-Mainstream Pooled Investment
(NMPI).
Bondholders are not permitted to acquire any of the properties from the Company, nor to participate as investors in the
company, its subsidiaries and any joint venture arrangements.
The foregoing summary is a general guide and is not a substitute for an investor obtaining professional advice on the
taxation implications of their investment.

UK TAXATION OF BONDHOLDERS | Page 23

Application Procedures
Bonds Series 3 are available in multiples of 1,000 with a
minimum subscription per application of 5,000. Applications
must be made in whole numbers of Bonds.
Applications will be processed in strict order of receipt and no less
frequently than on the last working day of each month.
The basis of allocation will be determined by the Arranger at its sole
discretion.
All documents will be despatched by first class post at the risk of the person(s)
entitled thereto.
Documents available for inspection: Copies of the Bond Series 3 and the Company's
articles of association will be made available, by prior arrangement with Real Estate
Associates Ltd, for inspection at the offices of the Arranger during normal business hours
until the offering is closed.
Further details of the Bonds and guidance on application procedures are available from
the Asset Manager, Regal Green Homes Ltd, at the address appearing at the end of this
document.

Money Laundering Regulations


To ensure compliance with the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007,
the Arranger may at its absolute discretion require verification of identity from any person lodging a
Form of Application (the "Applicant") and without prejudice to the generality of the foregoing, in particular,
where any person appears to be acting on behalf of some other person, verification of the identity of the
person on whose behalf the Applicant appears to be acting may be required.
If within a reasonable period of time following a request for verification of identity the Arranger has not
received evidence satisfactory to it as aforesaid, it may, at its absolute discretion, reject any such application
in which event the remittance submitted in respect of that application will be returned to the Applicant (without
prejudice to any rights to undertake proceedings to recover any loss suffered as a result of the failure to produce
satisfactory evidence of identity).
The above information is provided by way of guidance to reduce the likelihood of difficulties, delays and potential
rejection of a Form of Application (but without limiting the Arrangers right to require verification of identity as
indicated above).

Page 24 | APPLICATION PROCEDURES | MONEY LAUNDERING REGULATIONS

Appendix: Bond Series 3 Principal Terms


1)

Introduction

The Instrument is made by the Company, relating to 10,000 Bonds of 1,000.00 each. A copy of the full instrument is
available on request. The following is a summary of certain of the provisions and potential investors are encouraged to
read the full instrument.

2)

Amount of Bonds

The Bonds represent a secured obligation of the Company. Up to 10,000,000 will be issued in Series 3. They will rank
pari passu between each other.

3) Certificates
The Company will issue certificates in the specified format.

4)

Interest

Interest shall accrue at 6.75% per annum from the date each Bond is issued to the Final Repayment Date. Interest will
be paid on the first day of April and October in respect of the preceding period (and if the payment date is a weekend
or a bank holiday in England & Wales, then on the next business day).

5)

Redemption and payment of Interest

The Company may repay any or all of the Bonds at 7 days notice. The accrued interest will be paid on the repayment
date. The Company will repay all the outstanding Bonds by 5th April 2020.

6)

Default

If any sum is paid late it will attract interest at 10.75% per annum.
The Company will call an event of default in various circumstances including following receipt of notices of default from
Bondholders holding more than 75% of the Notes then outstanding.

7)

Transfer

Bonds are not transferable. In the event of the critical illness or death of a registered holder, the Company at its absolute
discretion may repay all or part of that holders Bond at par without interest.

8)

Representations & Warranties

The Company makes various representations and warranties including, inter alia, that no event of default has occurred
at the date of issue.

9)

Covenants

The Company makes various covenants including inter alia the provision of reports to Bondholders; that all finances raised
from issuing the Bonds will be made available to the business of the Limited Partnership; that the Limited Partnerships
assets after payment of legally preferred creditors will be made available to meet the obligations to Bondholders, subject
to the relevant insolvency laws; and the amount of any senior debt drawn shall not exceed 75% of the market value of
the Limited Partnerships assets.

10)

Register

The Company will maintain a register of Bonds and Bondholders.

11)

Non-Recourse

Bondholders have no recourse beyond the relevant security allocated to this Bond series by the Company and the Asset
Manager.

APPENDIX: BOND SERIES 3 PRINCIPAL TERMS | Page 25

Contact Details
All enquiries relating to this information memorandum may be directed to the Asset Managers marketer in the first
instance:
Regal Green Homes Ltd
The Hub Business Centre
35 Sherwood Street
Market Warsop
Mansfield
Nottinghamshire
NG20 0JR

Tel: 01623 840909


Email: info@regalbond.com
Web: www.regalbond.com
All enquiries relating to the developments can be directed to:
Regal Green Homes Ltd
Unit 19 Piper Business Centre
220 Vale Road
Tonbridge
TN9 1SP

Tel: 01732 759430


Email: info@regalbs.co.uk
Enquiries relating to previously-submitted applications may be addressed to the Arranger:
Real Estate Associates Ltd
3 Minster Court
Mincing Lane
London EC3R 7DD

Tel: +44(0)20 7220 7180


Email: mail@realestateassociates.co.uk