Detailed Model

Property Investment Opportunities

Embankment in London

 

"Our goal is to provide our investors with all the information they need to decide whether an opportunity is right for them."

Tal Orly, Founding CEO

Each project launches with an investment pack that includes market research, a business plan, due diligence on the developer or operator and a market sensitivity test.

But this is just a fraction of the information available, and if investors want to view full legals, all the market scenarios modelled, or speak to the analyst who conducted the due diligence, then their Investor Relations Manager is on hand to arrange that for them. 

Cogress Limited is authorised and regulated by the Financial Conduct Authority (no. 696171).

Property Development Investment: The Process

Cogress oversees every property development investment opportunity from start to finish; originating the deal, facilitating investment, and monitoring the development until exit.

Our Origination team is tasked with finding development investment opportunities. They conduct the initial due diligence, discounting any deals that don't meet our strict investment criteria. Once they are confident of a deal, they will refer it to review by our first Investment Committee. Should it pass this initial stage, full due diligence begins.  

Typically, we spend up to three weeks reviewing and examining every aspect of the project in detail, including but not limited to: 

  • A line-by-line assessment of the costs, including review by a qualified quantity surveyor;
  • Assessment of all risk factors relating to the construction;
  • Detailed scrutiny of the planning permission granted (NB: we only launch projects with planning permission already in place);
  • Evaluation of the local market, target buyers and comparable properties to determine sales values and saleability;
  • The project’s financing arrangements and documentation;
  • All existing legal documentation;
  • The sensitivity of the project to unexpected changes in gross development value (GDV) or timescales; and
  • the developer’s experience, track record and financial and operational stability.

If we are satisfied with every element of the project’s suitability it will it be passed to our second Investment Committee who will make the decision on whether to launch the opportunity to investors. The minority of projects which undergo initial due diligence make it through to launch. On average we launch 1-2 investments per month.

Our model wouldn’t be able to fulfil its purpose without the exacting standards behind our selection process. Due diligence sits at the very core of our property investment strategy. It’s something we take extremely seriously. 

Avi Miller
Head of Structured Finance, Cogress

Once the opportunity is approved by our final Investment Committee, our analysts’ research is summarised and presented to registered investors in a detailed and transparent business plan.

Our aim is to ensure investors have all the information they need to reach an informed decision.  If they have questions, an Investor Relations Manager is always on hand to provide additional information, meet face-to-face or even arrange a site visit or introduction to the developer.  

Investment Approaches

Those who choose to invest in any of our property investment opportunities pool their capital and become partners in a Limited Partnership specific to that project. Cogress is the General Partner, acting as a single voice for all investors and working to protect their best interests.

Each project is structured as either a private equity investment opportunity or a mezzanine loan. 

The Funding Structure 

Typically, about 65% of the total cost of the development is provided by a senior debt provider (eg: bank or specialist property lender)

Of the remaining 35%, c. 90% is provided by Cogress investors in the form of a private equity or mezzanine loan investment.  The remaining 10% takes the form of an equity injection from the developer.

The developer must have skin in the game. We expect all developers to personally contribute to equity—and make personal guarantees—to ensure they have a very real and personal incentive to deliver the project with results. 

Zac Gazit
Business Development Director, Cogress


The Equity Model

With the equity model, a Joint Venture Agreement (JVA) is established between the developer and the investors’ Limited Partnership.  The JVA establishes the relationship between the two parties and outlines the responsibilities of the developer.  Investors have an equity stake in the property development and share any profits with the developer upon exit. The investment is secured against the title deeds of the property and a personal guarantee from the developer to compensate for any cost overrun. 

Each JVA is investment-specific. Cogress ensures that the JVA terms protect investors' best interests, incorporating mechanisms that mitigate some of the risks of property development, such as delays or cost overruns.


The Mezzanine Debt Model

In a mezzanine debt investment opportunity, investors collectively provide funding in the form of a mezzanine loan to the property developer to finance part of the development project’s costs.

The investment is typically secured with a second charge against a property, alongside a personal guarantee from the developer. 

Investor returns are received upon exit in the form of interest on the loan.  

Mezzanine lending ranks below senior debt (the main first charge lender) but above equity holders.

With investments starting at £20K, these different investment options, coupled with the breadth of Cogress’ property investment opportunities in terms of locations and development type, offer investors good opportunities for portfolio diversification.  

Hotel Development Investment: The Process

Through its development arm, Arcstone, Cogress has forged a partnership with the global hospitality chain Selina, offering our community the exclusive opportunity to invest in its expansion into the UK and Portugal.

Selina's unique business model has enabled the company to grow across 19 countries, taking over and refurbishing under performing hotels to create beautiful, unique spaces that can be used by locals, travellers and freelancers alike. 

Cogress release portfolios of hotels throughout the year, giving our investors a choice of investment opportunities that generate a quarterly return and pay an uplift on exit. Like our development investment projects, each Selina portfolio must pass through three Investment Committees before it can be launched to investors. 

Typically, we spend up to ten weeks reviewing and examining every aspect of the portfolio in detail, including but not limited to: 

  • The market and competitive landscape to assess the hotel’s pricing strategy
  • The forecast occupancy levels vs independent occupancy data in the relevant city/ location
  • The target food & beverage revenue and costs against figures from the site prior to ownership by Selina
  • The costs of refurbishment vs other similar sites
  • Hotel floor plans and accommodation breakdown and suitability to target market
  • Location overheads including staff numbers, repairs and maintenance
  • All permits required to trade

 

The Funding Structure

Your investment is loaned to the portfolio and used to fund or reimburse the costs of refurbishing and rebranding the hotels to fully optimise them and make them operational Selina venues. 

Monitoring all Property Investment Projects

Once a project is underway, our portfolio managers closely monitor it, acting as the eyes, ears and hands on the ground for our investors and ensuring we put their needs first.

They speak regularly to the developer or hotel operator, conduct site visits, review finance structures, monitor construction progress, and assess the sales strategy. All this information is compiled into regular reports which are shared with investors.

Always Putting Investors’ Interests First 

As you can see, our uniquely comprehensive end-to-end approach both untangles the complexities of property development investment, and provides a unique level of assurance for our investors.

From selecting the right opportunities and conducting detailed due diligence, through carefully structured investment vehicles, to the personal attention and support provided by our IRMs, the Cogress approach has our investors’ interests at heart. 

Our development partners receive far more than just money—the understanding, expertise and hands-on support that Cogress provides really are unique. The flipside is that we will always put our investors’ interests first. 

Tal Orly
Co-founding CEO, Cogress