Property Investment Opportunity

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1. Investment Brief – Leasehold Property with Deferred Rental and Yield Participation
2. Purchase price: £495,000
3. Investor deposit (15%): £74,250
4. Loan Offset against Rental Contract first 25 Years: No repayments
5. 40 Year Rental Contract: £2,041 per month
6. Yield Revenue: $46k per annum
7. Tenure: Leasehold, 99 years

This investment is structured as a long-term, income-producing property asset with two distinct return components: deferred rental income and agricultural yield participation.

Under the arrangement, property investment loans are provided by Proferlo and supported by a 40-year rental agreement. The rent is fixed at £2,041 per month for the first 25 years, and during that period Proferlo assumes the associated financial obligations and operating risks. In practical terms, this means the owner has no loan repayment burden, no maintenance exposure, no insurance cost, and no sundry property expenses during that phase. If rent is not paid, Proferlo remains contractually responsible for loan repayments and associated costs.

From year 26 to year 40, the owner then begins receiving the rental income directly, starting at £2,041 per month (£24,492 per annum), with a 1.25% annual increase for the remaining 15 years.

In addition, the rental agreement contains a 30% yield clause, entitling the owner to 30% of the annual produce yield from years 5 to 40, with projected income of £46,000 per annum, while all associated operating costs remain covered by Proferlo. This creates a second revenue stream that begins materially earlier than the direct rental income.

The property is also insured to the full value of £495,000, which provides an additional layer of downside protection against asset impairment.

Using the figures you provided, and assuming:

• Initial investor cash outlay is £74,250
• Yield income starts in year 5 at £46,000 per year
• Direct rent starts in year 26
• Rent escalates at 1.25% annually from year 26 onward
• No owner-side operating costs
• No sale value, refinance value, or residual leasehold value has been included in the model
   

the indicative returns are:

Investor-equity IRR (based on deposit only): approximately 25.3%
Asset-level IRR (based on full £495,000 purchase price): approximately 7.1%

Over the 40-year income term, the projected gross cash inflow is approximately:

• Yield income: £1,656,000
• Rental income received by owner in years 26–40: c. £401,334
• Total projected gross inflow: c. £2,057,334
   

That is before considering any residual value in the remaining lease term after year 40.

This investment has some very attractive features, but it should still be viewed through a risk lens.

Strengths

• Low initial equity requirement relative to headline asset value.
• No owner exposure to loan servicing during the first 25 years.
• No owner exposure to insurance, maintenance, or sundry operating costs under the stated structure.
• Dual-income model: yield participation from year 5 plus rental receipts later.
• Full insurance cover to the stated value of the property.
• Contractual risk transfer to Proferlo strengthens cashflow resilience, assuming Proferlo remains financially sound.