Earlier this month, we successfully completed the purchase of a mixed use property in Folkestone, an important milestone for Jaox Ltd as our first acquisition of this kind. The property comprises a ground floor commercial unit alongside a two bedroom flat and a three bedroom flat above.
What makes this project particularly significant is not just the end result, but the strategy behind it.
Rather than following a traditional purchase route, we secured this opportunity through an option agreement signed last year. This allowed us to take control of the property prior to completion, giving us the time and flexibility to carry out refurbishment works, tenant the property, and stabilise the asset before formally acquiring it. This approach aligns closely with our core strategy of adding value while managing risk and capital exposure.
Adding Value Before Ownership
During the option period, we undertook a full programme of works across the property. The residential flats received cosmetic refurbishments to bring them up to a strong lettable standard. The commercial unit required a more extensive intervention, including a full strip-out, new flooring, complete rewire, upgraded alarm systems, and fire boarding to meet compliance standards.
A key focus throughout was ensuring the building met all fire safety regulations and was free from asbestos, both critical factors when dealing with mixed use assets.
By the time we completed the purchase, all units were tenanted and income producing, effectively transforming the property from a partially underperforming asset into a fully operational investment.
Finance Strategy and Capital Efficiency
One of the most powerful outcomes of this project was our ability to secure term finance based on the end valuation rather than the purchase price. This significantly reduced the amount of capital tied into the deal, demonstrating the effectiveness of buying well and adding value early.
Here are the key figures:
This equates to approximately 72% loan-to-value (LTV) against the end valuation, but 90% of the purchase price, allowing us to recycle capital efficiently into future projects.
Lessons Learned
As with any project there were valuable lessons along the way.
Fire safety compliance proved more complex and costly than initially anticipated. Achieving a satisfactory fire risk assessment in a mixed use building requires careful planning, specialist input, and attention to detail. This is an area we will be exploring in more depth in a future update.
Additionally, coordinating a commercial lease to complete simultaneously with the property purchase introduced a layer of legal complexity. Mixed use transactions involve significantly more enquiries and due diligence compared to standard residential purchases, requiring patience and strong professional support.
Looking Ahead
This project represents more than just a successful acquisition, it demonstrates the strength of our approach: creative deal structuring, disciplined value-add execution, and a focus on capital efficiency.
Most importantly, it reinforces our commitment to delivering well managed, income producing assets that provide both security and performance for our investors.
As always, we will continue to share both the successes and the lessons learned, so you can see exactly how your capital is being put to work.