Radius Equity, a specialist provider of EIS and SEIS investments, has launched a GBP750,000 EIS-compliant investment into Up Estates, an new estate agency.
Radius Equity believes that online property portals are transforming the estate agency industry, and traditional agencies are losing market share to new low-cost competitors. Up Estates is a new breed of real estate agency which combines the comprehensive, low cost reach of online portals with the personalised experience of traditional real estate agencies.
Up Estates has established a strong regional foothold in Coventry, Nuneaton and Hinckley, and has seen significant success within the region. For example, the agent expects to list at least 600 properties in 2015, double the number of listings in 2014. The mix of a tight regional focus and online marketing has established the Up Estates Nuneaton office as the market leader amongst all other estate agents in terms of the volume sales within its region in just two and a half years.
Unlike other agencies and online sites, Up Estates offers three low cost fee payment structures to clients, which all include the same set of highly personalised services, giving the option to pay the fees upfront or later on. These services include free property valuations, photography, for sale boards, matching to Up Estates’ local database and marketing on the most successful online property sites.
Radius Equity adds that despite its low fees, Up Estates is already profitable, and is now consistently listing more properties each month than any other estate agent branch in the area.
Radius Equity says Up Estates has plans to expand and roll out its business model to other regional centres in the UK. From January 2016, over a 12 month period, Up Estates plans to open at least seven new local offices in target areas including Birmingham, Leicester and Nottingham.
Radius Equity’s GBP750,000 investment opportunity in Up Estates will fund the growth plan. Completion of the investment is targeted for late November 2015.
Gary Robins (pictured), Director at Radius Equity, says; “The real estate sector is evolving rapidly and Up Estates is leading the way as a regional agency with online capabilities.”
“Homeowners are becoming increasingly reliant on online platforms to find property, but sellers are missing out on the personalised regional service of traditional agencies. Online sites focused on national coverage don’t have the ability to market your property personally and cannot offer practical services such as house showings or accurate property valuations.”
“Up Estates is a true hybrid, taking the best that online platforms and traditional agencies have to offer and creating a new breed of real estate agency.”
“The management team at Up Estates has had incredible success in a relatively short time period. The areas where they plan to expand have very similar housing demographics and so the experience gained in the last couple of years will be indispensable going forward.”
Up Estates plans to achieve an exit after 3 years to either a trade buyer or private equity investor, with a target exit value of 4.2x net cost of investment.
Radius Equity says investment in Up Estates is expected to be eligible for tax relief under the EIS scheme. The Enterprise Investment Scheme (EIS) offers attractive opportunities for equity investors to make potentially rewarding, tax efficient investments in unlisted businesses. Tax relief available under the EIS scheme includes 30% income tax relief and tax free capital gains on shares held for at least three years.