Bricklane – 18 Month Results

18 Month Results (Regional Capitals Fund only)

The first 18 Month Results for investing through the Bricklane platform are as follows –

Expected ROI (Annualised) 5.00%
Actual ROI (Annualised) 2.39%

Following on from the previous results I have utilised the same method to set the ‘Expected ROI’ at 5.00%. The ‘Actual ROI’ comes in at 2.39%. Right, Bricklane is not technically P2P in the traditional definition, it is in fact a Real Estate Investment Trust (REIT), which is essentially an equity holding in a ‘bricks & mortar’ property fund. Where as P2P is traditionally a purchase and holding of debt, for a return. Bricklane also charge a sizeable deposit fee of 2.00% (1.00% for deposits over £20,000). My Bricklane holdings are still in a growth phase, meaning I am increasing my holdings, but with a 2.00% deposit fee I’m actually reducing my returns in the short term.

So my strategy has been to target an inflation level return (2.40%) before making a further deposit. Now for the clearer picture, if I remove the deposit fee then calculate the return, then anualise it (return /18 x 12) it comes out at 2.45% which can hardly be described as attractive. Bricklane also charge a 0.85% annual management fee further reducing returns. The UK property market has cooled significantly in recent months over the uncertainties around Brexit. This has resulted in a significant reduction in the bi-monthly property value appreciation payment, although it has not fallen to a negative so far overall (the share price has dropped though in the most recent calculation, for only the second time in the funds history, indicating a devaluation in some properties). The bi-annual rental dividend has also reduced over the last 3 payments despite my holdings increasing and this is a worrying trend suggesting there have been difficulties in generating the expected rental income.

Company and Fund Information

The London Fund 

The London Fund is now made up of 11 properties, 3 of which are undergoing a due diligence process. The combine value of the properties in the London Fund (including those in DD) is £5,058,000.00 with average property value of £459,818.18.

The Regional Capitals Fund

The Regional Capitals Fund is now made up of 67 properties, 16 of which are undergoing due diligence. The combine value of the properties in the Regional Capitals Fund (including those in DD) is £12,000,500.00 with an average property value of £179,111.94.

Both funds have continued to grow over the 6 month period although I’m not in possession of full figures for the previous 6 month period so can’t provide accurate, comparable statistics.

Conclusion

I take a slightly different approach with Bricklane as I view it as a very long term investment prospect, protentaily over 20 years. As I’m considering using it as part of a retirement fund. Even so I can’t deny the latest figures are disappointing, but we live in exceptional times. The Brexit worries that are cooling the UK property market should hopefully pass and I do believe any lost gains now will be recouped fairly quickly once the future becomes a little clearer. So Bricklane will remain within my portfolio but if I’m being entirely frank this is the first period I have entertained the prospect of dropping Bricklane and what alternatives I could source to replace it.

Referral Link for Bricklane

This link provides a referral bonus of £225 when a new customer signs up and invests £5000 using the link (T&C’s apply). The bonus is split £125 to the new customer and £100 to Proptechfish.com Any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.

 

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