Syndicated Development Loan Opportunity.

The Cocoa Suites Lending Syndicate Rowntree Wharf, Navigation Road, York, Y01 9XA

• The construction funding of 28 new apartments within a converted landmark Grade 2 Listed former flour mill on the River Foss, York. • A landmark heritage building in the heart of York with current planning permission and with both internal and external car parking available. • A phased construction programme, enabling the development risk to be mitigated. • Project timescale c. 18 months. • Annual Return of 8.00 % p.a. interest paid on redemption. • Fully secured by way of a first fixed charge over the freehold.

Rougemont Limited is authorised and regulated by the Financial Conduct Authority. Ref No. 516918 July 2017 Important Legal Notice This document describes a commercial lending opportunity that is funded entirely with investors’ equity and with no third party lenders. An investment of this nature involves risk; it is illiquid in nature and may not be suitable for certain investors.

Investors must be prepared to bear the risk of an investment in the loan for an indefinite period, and be able to withstand the loss of all or part of their investment.

All reasonable care has been taken to ensure the information contained within this document is true and accurate, but it should not be construed as advice upon which reliance should be placed. Please refer to the Risk Analysis and the assumptions upon which the returns described have been based.

The Cocoa Suites Lending Syndicate - Key Points

The funds raised (”the Funding”) will assist in financing the construction of 28 high specification new apartments branded Cocoa Suites (“the Project”) on parts of the ground and first floors within Rowntree Wharf (“the Property”) in York, over a project period of c. 18 months. The Property is situated on Navigation Road in the Walmgate area of York, located close to the Historic Core Conservation area of the City. York is the commercial centre of North Yorkshire and is an internationally renowned tourist centre.

The Funding will be secured by way of a first fixed legal charge over the Property, together with an all assets debenture over the development company, Cocoa Apartments Limited (Company Number 10320303) (“the SPV”), and a first fixed charge over the JCT build contract to be entered into by the SPV and the Contractor.

The Funding will benefit from an interest rate of 8.00% p.a. All capital and interest will be repaid by way of a priority return from the sale proceeds of the completed apartments, once the Project has become self funding.

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9 8 10 1 5 7 7 6 1 Jorvick Centre 4 3 2 York Minster 3 Hungate Scheme 4 Student Castle Scheme 5 Parliament Street

YORK 6 MAFF HQ 7 River Foss 8 The City Walls 9 Retail Core 10 The Shambles

2 The Cocoa Suites Lending Syndicate The Property Rowntree Wharf is one of York’s finest former industrial buildings constructed in c.1860 and consisting of five main floors and a nine storey water tower. The Property is a Grade 2 listed building which was converted in 1990 by the Joseph Rowntree Foundation to provide offices and residential apartments. The ground and first floors were converted to provide office accommodation, whilst the second to fifth floors were converted to 68 residential apartments, which are all occupied by long leasehold owners and subject to individual ground rent. There are three passenger lifts situated at either end of the building providing access to all floors. The Property benefits from 122 car parking spaces located both externally and internally within the neighboring multi-storey car park. The Property is maintained by way of a service charge arrangement. The Property is situated in the Walmgate area of York close to the historic Core Conservation Area. The River Foss passes the building to the northern side and Wormald's Cut adjoins its southern side. To the north, the Property overlooks the impressive Hungate development and to the south, the Walmgate apartment scheme. The Walmgate area has seen substantial developments of private, modern apartments in recent years. The Hungate scheme, north of the River Foss, has also been substantially developed to form an exclusive residential development.

Location

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3 The Cocoa Suites Lending Syndicate The Project Detailed planning permission and listed building consent was granted for the Project on 6th December 2016 (Application Reference 15/01891/FULM). Permission was granted for: “partial conversion of ground and first floor offices into 34 residential apartments with associated works to upgrade bin storage, cycle parking and provide external flood and fire escape stairs.” The Project is to be phased with funding only required for the first 28 apartments. The apartments will be marketed as the Cocoa Suites at Rowntree Wharf. A detailed specification for the apartments is available upon request. The planning permission has no s106 planning obligations, but it does have a number of conditional flood defence obligations due to the property’s close proximity to the River Foss. These conditions have been accommodated within the conversion design and have been approved by the planning authority.

Indicative internal finishes The Developer Raven St John Limited (Company Number 09555490) (“RSJ”) is both the owner of the freehold of the Property and of the SPV which will undertake the Project. Whilst RSJ is a relatively newly incorporated company, it has recently been involved in the completion of two residential developments in Yorkshire; Biba House in York; (http://www.investinyork.co.uk/wp-content/uploads/2014/07/Biba-House-Brochure.pdf); and Harewood Villas in Harewood, near Leeds. It has also acted in an advisory capacity in relation to The Black Swan Yard development in Helmsley, North Yorkshire; http://www.croftresidential.co.uk/property/houses-for-sale-helmsley-black-swan-yard-yo62-5bj/ Two of the directors of RSJ are Jan Fletcher OBE and Kevin Linfoot, both of whom have over 20 years’ experience in successfully delivering residential and commercial development projects, both independently and in collaboration with joint venture partners; collectively, they have been responsible for development projects totalling in excess of £1.75 billion. Examples of which are as follows:-

Biba House, York The development of 24 apartments Bridgewater Place, Leeds The development of 200 apartments The Quay, Leeds The development of 80 apartments The Royal Mail Sorting Office, Leeds The development of 140 apartments West Point, Leeds The development of 220 apartments The Calls, Leeds A mixed residential and commercial development.

Over the past 20 years they have been responsible for the construction of approximately 15,000 apartments. Jan Fletcher OBE is also Chairman of Rougemont Limited (Company Number 04473580) (“Rougemont”), which is the FCA authorised operator and promoter of this investment opportunity.

4 The Cocoa Suites Lending Syndicate The Security Funding for the Project will be secured by way of a first fixed charge over the Property, which is currently unencumbered and has been valued by Colliers at £2.35m as at May 2017, together with an all assets debenture over the SPV and a first fixed charge over the JCT build contract.

The Funding Proposal, Structure and Timing Rougemont will act as the FCA authorised promoter and operator of the lending Syndicate on behalf of investors. • The Funding requirement is £2,200,000 (two million two hundred thousand pounds), which will be used to assist with financing the Project. All fund drawdowns will be certified by Evolve Ltd, who will act as the project monitoring surveyor (”the Monitoring Surveyor”). • Investors will invest funds into a newly formed Limited Liability Partnership, Cocoa Suites LLP (”the LLP”). • The SPV will own and undertake the development and will be the legal entity to whom the LLP will lend the funds. Until such time as all investors have received full repayment of their capital and interest, the SPV will not engage in any activity other than the Project. • The SPV is owned by RSJ. • RSJ’s equity in the Project is the Property, which was valued in May 2017 by Colliers LLP at £2.35m, and all the costs associated with having obtained the planning consent. • The LLP will benefit from a first fixed legal charge over the Property, together with an all assets debenture over the SPV and a first fixed charge over the JCT build contract. • RSJ and the SPV will also each enter into a subordination deed with the LLP pursuant to which the SPV will agree not to make any payments to RSJ until such time as the Funding (and interest thereon) has been repaid. • Investors’ funds will be retained in a dedicated LLP bank account administered by Harlow Property Management Limited (Company Number 702593) and the funds will be utilised solely in relation to the Project. The construction will be undertaken by way of a standard fixed price JCT build contract. Funds will only be drawn from the LLP bank account on certification from the Monitoring Surveyor. • The total gross development cost of the Project is £4.01m (incl. interest); however, due to the proposed phasing the SPV will be able to adequately cash flow the construction costs by ‘recycling’ the Funding throughout the programme of works and by utilising the ongoing early proceeds of sale from completed properties. • The LLP will benefit from a priority return of 8.00% per annum, which will be distributed, pro rata, to investors. Interest will commence accruing from the date of receipt of cleared funds and capital will commence being repaid towards the end of the Project from the sale proceeds of properties with interest being repaid with the final instalment of capital.

Key Figures

The Property Valuation: Colliers LLP, May 2017 (£2.35m)

Gross Development Value (including car parking and ground rents: £4.99m

Total Funding: £2.20m

Square footage of the Development: 12,632 square feet

Average Sales Value per square foot: £380

Construction and development costs per square foot: £306

Loan to Gross Development Value: 44.0%

5 The Cocoa Suites Lending Syndicate The Contractor

Sorrell (York) Limited (Company Registration Number: 00581869) (”the Contractor”) www.sorrellconstruction.co.uk is a highly reputable company, of good financial standing, which has been in existence since 1989. In the event of a contractor default, then the standard terms of the JCT construction contract will enable the SPV to take control of the site and employ a new contractor, or to complete the Project itself. The SPV will also be employing the services of the Monitoring Surveyor, whose responsibility it will be to certify all payments that are made to the Contractor and to ensure that such sums are always maintained adequately ‘in arrears’ and with the appropriate retention.

Risk Analysis Investors will benefit from a first fixed legal charge over the Property and the fixed price JCT build contract. It will also have an all assets debenture over the SPV. The fixed price JCT contract will be phased in order to mitigate any potential over runs in either the project costs, or the projected timescale. The LLP’s funds will be advanced in arrears and subsequently ‘recycled’ from the early sales of properties in order to limit the total amount of funds exposed to the Project and the Contractor. The Monitoring Surveyor will be employed by the LLP to certify and approve all drawdowns, the costs of which will be met by the SPV. Investors will receive a priority return in respect of both their interest and capital repayments; neither the SPV nor RSJ will profit from the Project until such time as investors have received repayment in full of both their capital and interest. The SPV’s project appraisal assumes an 18 month completion timescale, during which time it is projected that all the apartments will have been converted and sold. Pre-sales have already commenced and at the time of publication 20 apartments have already been reserved and are progressing to an exchange of contract. These sales represent a sales value of £2.93m and the prices achieved are at the projected value. During the 18 month period the LLP will have generated interest of £264,000 and, assuming that sales values are achieved as forecast, the SPV will have generated a gross profit on GDV of c. 15%. Therefore, in the event that the Project timescale overruns, or the Project incurs unforeseen additional costs, there is adequate ’margin’ to cover such costs which ensures that the LLP capital and accrued interest can be fully discharged once the apartments are sold. In the event that RSJ is unable to sell all the apartments it is their intention to retain ownership of the properties and discharge the LLP’s interest in the Project.

Costs and Fees RSJ has funded all the legal and professional fees associated with obtaining the planning permission and facilitating this opportunity. RSJ will not seek to recover any of these costs, or profit from the SPV, until such time as the LLP’s capital and interest has been repaid in full. Rougemont will receive a one off promotion and operator’s fee in respect of this fund raising exercise, based on 3.00% of the Funding. 1.5% of this fee will be paid on completion of the loan and 1.5% on redemption of the loan.

Indicative internal finishes 6 The Cocoa Suites Lending Syndicate Project Team The following are the Project’s key relationship partners;

Authorised funding operator and promotor – Rougemont Ltd

LLP’s solicitors – Gosschalks LLP

Freehold Owner – Raven St John Ltd

Contractor – Sorrell (York) Ltd

Monitoring Surveyor – Evolve 2 Consult Ltd

Planning Consultant – O’Neill Associates

Residential Property Agent – Ashtons York

Banker to the LLP – Yorkshire Bank

Timing Completion of the Funding is required to take place no later than 22nd August 2017. Cleared investors’ funds are therefore required to be in the Syndicate solicitor’s bank account by 18th August. Availability The Funding is available for syndication with a minimum investment of £50,000 (fifty thousand pounds). Interested parties are invited to certify their Investor Eligibility (see below), review the Important Legal Notice on page 2 & 8 and to make a formal reservation by completing the Reservation Form on page 9 & 10. On receipt of a Reservation Form Rougement will issue an investor pack for completion.

Investor Eligibility All syndicated development loan opportunities promoted by Rougemont constitute an Unregulated Collective Investment Scheme (“UCIS”) as defined in the Financial Services and Markets Act 2000 (“FSMA”). Rougemont is authorised by the UK Financial Conduct Authority (“FCA”) to establish, operate and wind up UCIS (Reg. No. 516918). In receiving this document you acknowledge and accept the following disclaimer: This document contains important information. It is being sent to you as a category of person falling within The Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 (“the Order”). The sole purpose of this document is to assist the recipient in deciding whether they wish to proceed with further investigation. Recipients should review this document having first considered the arrangements and the Important Legal Notice (page 2 and 8).The description of the arrangements contained within this document constitutes a summary of the arrangements. A detailed description of the syndicated structure is provided to potential Syndicate members with the legal purchasers pack which will be provided should a potential Syndicate member wish to proceed. ‘Exempt Persons’ falling within the Order include: • ‘Investment Professionals’, who are Authorised FCA Persons and who are defined, according to the Financial Services and Markets Act 2000, as having professional experience of participating in a UCIS for the purpose of their business. • ‘Certified Sophisticated Investors’ who are defined as investors who are self-certified, or who have been certified by an FCA Authorised Person as being sufficiently knowledgeable to understand the risks associated with participating in a UCIS and who have signed a requisite Certified Sophisticated Investor Declaration in accordance with COBS 4.12 of the FCA Handbook. • ‘Certified High Net Worth Individuals’, who are defined as investors who have self-certified in accordance with COBS 4.12 of the FCA Handbook or who have been certified by an FCA Authorised Person confirming that during the financial year immediately preceding the date on which the certificate was signed, held an annual income of not less than £100,000, or net assets of not less than £250,000, excluding their primary residence and benefits from life policies. • A ‘High Net Worth Company’, which is defined as a corporate entity with called-up share capital or net assets of either (a) in the case of a company with more than 20 members, or which is a subsidiary of a company with more than 20 members, not less than £500,000 or, (b) in the case of any other body corporate, not less than £5 million. Confirmation of prospective clients’ investor status must be received by Rougemont in advance of any information or promotional material in respect of an investment opportunity being provided.

7 The Cocoa Suites Lending Syndicate Important Legal Notice 1. Syndicated investment opportunities that are promoted by Rougemont qualify as Unregulated Collective Investment Schemes and may only be promoted to; Investment Professionals, Certified High Net Worth Individuals/Companies and Certified Sophisticated Investors as detailed in COB 4.12 of the FCA Handbook (“Exempt Persons”). The protections normally afforded by the FSMA and compensation entitlements under the UK Financial Services Compensation Scheme may not apply.

2 No contract is formed by the provision of this material or any subsequent oral or written communication between Rougemont and an ‘Exempt Person’. A contract is only formed on the completion of a valid Syndicate Contract in a form approved by Rougemont and executed by both parties. The Syndicate Contract forms the entire agreement between the parties unless the Syndicate Contract is expressly varied by the parties.

3. Commentary and other materials provided to you in any manner are not intended to amount to advice on which reliance should be placed. Rougemont therefore disclaims all liability and responsibility arising from any reliance placed on such materials or by anyone who may be informed of any of its contents. Rougemont does not provide or hold itself out as permitted to provide specific investment advice. Potential syndicate members should consult with an FCA regulated Independent Financial Advisor (authorised to provide such advice under the FSMA) as to the suitability of any investment opportunity promoted by Rougemont and the risks associated with it. You are also advised to take independent legal advice.

4. Rougemont has taken all reasonable care to ensure that the information provided in any material supplied to you, or in any written or oral communication with you, is true and accurate. However, all information is capable of independent verification and we advise you to seek such verification. Copies of any documents referred to or source material are available for inspection at Rougemont’s Offices. While all reasonable care has been taken no liability or responsibility is accepted for any errors and omissions within this prospectus.

5. To maximise returns, Syndicate members may need to hold their investments on a long-term basis. As a consequence the arrangement is not suitable for short-term investment.

6. Other than between other Syndicate members and Rougemont’s approved client base there is no established secondary market for the sale of a holding in any opportunity the arrangements and therefore there can be no guarantee that you will be able to readily dispose of your holding, or sell it at a particular price.

7. Property values may fall as well as rise and purchasers should be aware that property values are a matter of the valuer’s opinion and are subject to market forces. There can be no guarantee as to future performance. The Developer may default, thus increasing the cost of the project until such default is remedied or the property is sold/let. There may also be costs incurred in dealing with any default which the Syndicate members will be responsible for.

8. Syndicate members should appreciate that the value of property is dependent upon a range of factors many of which are outside the control of Syndicate members; these include but are not limited to, fluctuations in land prices, construction costs, interest rates, changes in taxation, changes in supply and demand, and environmental factors.

9. You are only entitled to use any promotional materials provided by Rougemont for your own use. Such materials are expressly not intended for distribution to any other party. Reproduction of the whole or any part of any materials provided is strictly prohibited.

Complaints

1. Should you wish to make a formal complaint concerning the services provided by Rougemont then please contact, in the first instance, Rougemont Limited at; The Elms, Oakwood Park, Bishop Thornton, Harrogate, HG3 3BF tel. 01423 877 910 and a copy of the company’s Complaints Handling Procedure will be issued to you immediately.

2. Once a complaint has been made to us we will acknowledge receipt within 14 days and seek to resolve the issue. Rougemont Limited is regulated by the FCA and in certain circumstances you may be eligible to refer complaints to the Financial Ombudsman Service.

The Elms, Oakwood Park, Bishop Thornton, Harrogate, HG3 3BF T: +44 (0)1423 877 910 | Email: [email protected] www.rougemontestates.co.uk

8 The Cocoa Suites Lending Syndicate The Cocoa Suites Lending Syndicate Reservation Form I confirm I have read and understand the Important Legal Notice on page 2 and 8. I would like to acquire a syndicate holding within The Cocoa Suites Lending Syndicate and would like to be issued with a purchase pack.

Please reserve a holding in the above syndicate for: (NB. Minimum holding £50,000)

£

Investor Details:

I confirm I wish to make this investment in the name of:

(Full Name in Block Capitals)

Following the completion of the syndicate I wish all future correspondence, capital repayments and interest payments to be sent for the attention of:

At the following address:

Postcode:

Financial Adviser Details:

Please provide details of your financial adviser (the ‘adviser’) where applicable. If this is not applicable please tick this box and then proceed to signing the Declaration.

Name of Adviser Contact:

Name of Adviser Firm:

Adviser Firms FCS reference number:

Address of Adviser Firm:

Postcode:

Email of Adviser: Telephone:

9 The Cocoa Suites Lending Syndicate The Cocoa Suites Lending Syndicate Reservation Form

Financial Adviser Details continued:

By signing this Reservation Form, I instruct you to pay the adviser, who’s details have been provided, the fees (if any) indicated below.

Single Advice fee (including any VAT chargeable by the adviser) payable following drawdown of the loan by the SPV, for advice related to this investment.

(Amount £ or “nil”)

I confirm that I have read and understand the terms and conditions attached to this promotion. I have considered the risk involved in proceeding with this purchase and have sought all the recommended advice required. I confirm that I qualify as an Exempt Person (as defined within ‘Investor Eligibility’ on page 7) and I would like to be issued with a purchase pack.

Signature Date / /

Name (BLOCK CAPITALS)

Please return this form to:

Rougemont Limited, The Elms, Oakwood Park, Bishop Thornton, Harrogate, HG3 3BF. Tel: 01423 877910, Email: [email protected] Email: [email protected] or [email protected]

10 The Cocoa Suites Lending Syndicate