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Brief Overview

Purchase of a property from a retired homeowner (over 60 years old) at a highly discounted price

- Vendors release equity from their properties without selling or moving out

- Vendors willing to receive additional income to supplement their pensions

- Vendors granted a lifetime annuity

Variable discount, according to

- The age of the vendor

- The characteristics of the property

- The location

When the vendor passes away, the property reverts to the buyer

Context

The French social and economic environment is strongly favouring reversionary property market

- People live longer due to progress in medicine (In 2020, people aged 60+ will represent 25% of the French population, vs. 20% today)

- Pensioner can no longer live on their pensions and require an additional source of income

10,000 reversionary transactions in France each year

- Types of properties: studio flats, apartments, villas and commercial properties

- Located in attractive areas: Paris and close suburbs, the French Riviera, the Atlantic coast

Types of Reversionary Properties

Tenanted VS Vacant

- Tenanted: Vendor lives in the premises.

- Vacant: Vendor lives outside the property. Buyers can use the property or rent it out.

Types of payment structure:

- Lump sum plus monthly annuity.

- Lump sum, no future annuity to be paid.

- Monthly annuity only (no lump-sum payment).

Tenanted or Vacant Property

The tenanted property:

- More than 95% of all reversionary investments

- The vendor lives in the premises until he or she leaves the property to go to a care home

30% of the tenanted properties are vacant before the vendor passes away

Buyers can then live in the property or rent it out

The vacant property:

- The vendor does not live in the premises

- The buyer can live in the property or rent it out

- Minimise risk and maximise return as the rent covers the monthly payments to the vendor

Lump-Sum & Monthly Payments

Discount to current market value based on age of the vendor

- The younger the vendor, the larger the discount (50% discount if vendor is over 70 years old, 40% if over 80)
Discounted value separated between lump-sum and monthly payments

- 10 to 30% of the property value paid a lump sum the day of the exchange of contract

- Outstanding amount is divided in monthly instalments based on the life expectancy of the vendor

Opportunity for the vendor to limit the payments of the instalments over a certain period of time (15-20 years)

- If the vendor dies prior to the term, the buyer will continue the payments to the vendor's heirs