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Shojin is an FCA-regulated fractional investing platform enabling global investors to build their wealth from UK-based real estate investment opportunities.

Invest - Products - Equity

Share in the profits with an equity investment

Development equity is typically structured as a loan, allowing investors to share in the profits of a project. 

What is development equity?

Earn returns similar to those of a property developer 

Development equity is used by property developers who need additional non-bank financing. These products are typically structured as loans which and sit below the senior bank debt, and any other debt, in the funding structure. When the project completes, investors receive a share of the profits.


How does development equity work?

Add Equity for full funding

To mitigate risk, a bank or senior lender will rarely lend 100% of total development costs to a developer. It is typically capped at the 80% mark, requiring the developer to contribute the remaining 20%.


The Shojin model lets developers cover this 20% through a combination of their own funds, Shojin’s co-investment and money raised from investors. By filling the equity gap, investors are granted a variable profit share at the end of the project.


Funds are paid back at the end of projects, usually 12 to 36 months from drawdown.

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Funding gap
Developers require equity funding due to a capital shortfall. Capital is tied up in other projects or they are unable to provide it via their balance sheet.
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Equity goes in first
Equity funding is put to work by the developer first - often to purchase land or development sites. The senior loan follows to fund the rest of the project.
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In priority to developer
Investors' equity always sits in priority to that of the developer, offering a cushion for your investment.

Why choose a Shojin equity investment?

Diversify your portfolio with profit sharing investments

Protection mechanisms
Shojin’s expertise lies in mitigating risks through protection mechanisms for investors. These include: cost overrun contingencies, first loss buffers and developer personal guarantees.
Zero planning risk
We only fund projects where planning has already been granted, leaving only the construction and sales stages.
Risk / reward profile
Equity is the riskiest position in the funding structure as it has lower priority (in terms of repayment) to debt. Equity investors are compensated with the highest returns.
Choose from the following to find out more.
Shojins Capital Stack
Capital stack

The capital stack represents the layers of funding and the order of repayment. First is the senior debt, then mezzanine, followed by preferred equity and finally equity.

  • Value above and below
    The value that sits below the investor is important because this is the amount that needs to get generated and repaid before the investor. The value above is equally crucial because it represents the cushion that investors have before their returns start getting affected.
  • Key ratios
    The position in the capital stack is indicated by the Loan-to-value (LTV), Loan-to-Gross-Development-Value (LTGDV) and Loan-to-cost (LTC), the higher the ratios the higher the risks.
  • Seniority matters
    The position in the stack becomes relevant if a project is not performing and fails to pay out all the funds, from the bottom of the stack upwards. The higher you rank, the more likely your capital and interest will be affected.

Assessing the suitability of a development in a given location is critical to the success of the project. Physical, economic and cultural factors interact with the development's design and purpose, affecting its viability and attractiveness to potential buyers or tenants.

  • Demographics of potential buyers
    The demand for a development is driven by the lifestyle preferences, practical needs, incomes and aspirations of potential residents. Whether located in an urban or rural locale, the development must cater for the requirements of buyers in that area.
  • Amenities
    The availability, quality and proximity of infrastructure, including transportation networks, schools, shopping facilities and employment opportunities play a vital role in determining a development's desirability.
  • Physical characteristics
    The geography of a location, such as terrain, climate, and proximity to natural resources, can impact project feasibility and execution. Extreme weather conditions, geological instability, or environmental regulations can lead to delays, increased costs, or even project abandonment.

To protect investors from individual project risks, protection mechanisms are put in place to secure investors from scenarios that put their investments at risk. They incentivise the developer to repay funds for investors to exit the projects.

  • Charges held with land registry
    A charge is the means by which lenders enforce their rights to property. A first charge entitles the lender repossess and sell the asset to recoup funds first, followed by a second charge which is paid out after the senior lender in priority over the developer’s equity.
  • Personal guarantees
    Borrowers may be asked to provide personal guarantees to make them legally liable to repay the loan. Whilst this is a legitimate way to add further security, it is also a way to keep the borrower focussed on repaying the loan especially if the scheme runs into trouble.
  • Additional security
    This may include cost overrun guarantees, debentures or cross-collateralisation across other assets the developer owns, which in the event of a default, can be repossessed and sold.

The complexity of a construction project impacts the level of risk for investors. This is driven by a combination of factors including intricacy of design, engineering requirements, execution, and management required to successfully complete the project. Fixed-cost contracts and professional advice from surveyors is typically required to manage these risks.

  • Scale of the build
    Larger intricate projects, such as high-rise buildings or sprawling housing developments, tend to be more complex due to the increased scope, logistics, and coordination involved. They typically require structural elements that demand careful engineering and construction expertise.
  • Nature of the site
    Challenging site conditions, such as irregular terrain, poor soil quality, or tight spaces with reduced access, can complicate construction logistics and impact foundation and site preparation.
  • Architectural design and permissions
    Unique, innovative, or intricate architectural designs can lead to complexity in construction, requiring specialised skills, materials, and precision. Likewise, planning conditions dictate specific delivery requirements and adherence to compliance.

Project phase

The stage at which investors come into the project determines the level of risk. Generally, the earlier the investors come into a development project, the more risk they take on as there are more milestones for the developer to hit. There are several categories of phase that should be considered.

  • Planning status
    A development project with no planning permission is ultimately a speculative play as it may take longer than expected, or in some cases never come through at all. Whilst if full consented planning or permitted development rights (office to residential conversions) are in place, you know what is being built and the associated value of this.
  • Type of development
    Full construction, conversion or renovation projects all have different levels of risk. If the structure of the building is already existent there are no associated costs uncertainties. Conversion and renovations are simpler to deliver which reduce time and cost risk.
  • Status of development
    Developments take time; there are many items which influence costs and timelines. Coming in at an earlier stage means that tendering, site ramp-up and preliminaries are required which present cost uncertainty. The closer you are to construction completion, costs are determined and it become more about realising the value.
Exit strategy

In order to get repaid and exit a project the value needs to get realised to release cash. This can take the form of the sale of the units or the refinancing of the block in its entirety.

  • Selling individual units
    Selling units is dependent on demand, attractiveness and local competition from similar units in the area. Sales and marketing strategies need to be executed to encourage pre-sales ahead of construction completion and bulk sales to reduce risk.
  • Refinancing to release funds
    Another option available to developers to repay investors is to refinance the entire finished block. A completed development commands a higher value than previously, against which a loan can be raised to repay investors. If the value is sufficient, this is likely a quicker solution than individual sales.
  • Occupancy for asset investments
    For income-generating assets such as student accommodation blocks that depend on occupants, pre-secure locked in tenancies reduce risks. Likewise for commercial assets, established tenants with strong covenants provide stable cashflows which reduce the risks.
Developer capability

A developer’s track record dictates their suitability to take on and deliver a given project. Their team, their financial credentials, capacity and trustworthiness all impact risk.

  • Previous developments
    Past performance is used to assess their ability to handle potential challenges and mitigate risks. Similarly, their reputation can influence the market's perception of the quality and value to attract buyers.
  • Contractor and supplier relations
    Established developers often have built relationships and with reliable contractors and suppliers, and have a strong professional team working for them, reducing the risk of delays or disruptions due to poor workmanship, material shortages or technical failures. Additionally, they need to have the capability to deal with situations where subcontractors and suppliers underperform or go out of business.
  • Financial standing
    A developer’s credit history is an indicator of how their previous developments have performed. Their asset and liabilities statements indicate previous success and ability to cashflow construction between drawdowns, provide personal guarantees and cross collateralise across their other assets to reduce the risks for investors.

Time plays a critical role in property development and has a significant impact on the associated risks. It is usually time, rather than cost, that affects a project’s success and profitability.

  • Market fluctuations
    The longer a project takes to complete, the more susceptible it is to shifts in market conditions and inflation. Changes in housing demand, housing prices, material and labour costs and economic factors can affect the project's viability and potential returns.
  • Financing costs
    Extended project timelines lead to increased financing costs in the form of interest payments. Whilst this might not impact a senior lender’s position, this does reduce the cushion for those further down the repayment chain. Equally, changes in interest rates overtime can increase overall project costs.
  • External factors
    Ove over a prolonged development period, geopolitical events, economic recessions, and unforeseen global disruptions can impact a project's risk profile.


The frequently asked questions and key terminology for investing in mezzanine loans.

What is an Equity investment? caret-down-light
Shojin Equity investments are those that are positioned last, after Senior and/or Mezzanine loans in the funding structure. They provide a variable profit share of the funds left at the end of the project once all other loans and costs have been settled. They are typically not secured by the underlying asset. As such they are deemed the most risky in the capital stack and provide a rate of return to reflect this.
Why would a developer take out an Equity loan? caret-down-light
Equity loans provide developers with a significant source of capital without requiring immediate cash outlays, allowing them to finance development projects with less personal capital investment. As these loans are not interest bearing, they provide more flexibility in repayment terms, typically when a project is fully completed.
What type of projects require Equity loans? caret-down-light
Developers leverage real estate development Equity loans to undertake ambitious projects, expand their portfolios, and bring complex and transformative developments to fruition. As such, they are relevant to practically all real estate projects that involve funding as long as the developer is happy to share profits with investors.
What are the returns for investors on a Equity loan? caret-down-light
Investors can expect estimated returns of 24%+ per annum on Equity loans depending on the loan-to-value and loan-to-cost ratios and other risk factors associated with a given project. Estimated returns are not guaranteed. These are deemed high risk investments.
What is the difference between Equity and Preferred Equity loans? caret-down-light
The key distinction is that Equity loans involve investors becoming equity holders in the project, which means they share in the project's profits. Preferred Equity loans sit in priority to Equity and get compensated with a fixed return.
Can Equity be structured as debt? caret-down-light
In property, the term 'equity' refers to an owner's or investor's financial interest in a specific property. Within the capital stack, all funds excluding the loans form the 'equity', just as it is with a mortgage. Whilst in stock trading, the term 'equity investment' is usually associated with purchasing shares of a given company. The two definitions give rise to much initial confusion. With Shojin, an equity investment can be structured in two ways - either as a profit participating loan (which provides income in the form of interest) or as the purchase of Shares in the company with protection over the asset (which provides income in the form of dividends and capital gains). Please do not get muddled by this term!
What other investors are saying about Shojin.
"Shojin is a trusted property investment platform you want to invest in. I have personally invested in a few of Shojin's projects over the years and am really impressed. "
Nina Norton
Private investor, UK
"I have several investments with the company and am confident this will continue. A great opportunity to expand your investment diversity. Competent, reliable and engaging staff. Transparency and thoroughness of information."
Thomas Pellew
Private investor, UK
"The investing process with Shojin was easy, and the staff I dealt with were quick to repond to any queries I had regarding my investment. I will hold my investments and continue to invest via Shojin in the future."
Heather O'Toole
Private investor, New Zealand
"Shojin is a great entry level for alternative investment. The returns are very good and I like the diversification, especially considering the global economic situation."
Ray Ng
Private investor, Hong Kong
"Shojin is a new and easy way to enter the global property market. It's a gateway to making good money from my investments, quickly. I recommend Shojin to all my friends."
Calvin Yau
Private investor, Hong Kong