The UK's second-largest property company is backing a new buy-to-let property fund for wealthy investors - but should you? Spun out of the law firm Charles Russell, the CR Property Fund plans to raise £300m, and will be managed by British Land (which will also invest up to £6m in its coffers). Launched last Thursday, with modest gearing it will be able to acquire between 450-500 London properties.
It is planned that two-thirds of the fund will comprise flats between £300,000 and £800,000 in areas such as Fulham and Battersea. The top slice will be prime central London homes of up to £5m in value. The closed-ended Guernsey fund has a lifespan of between five and nine years (depending on market conditions) and an ambitious gross target return of 14.5 per cent a year (the majority is expected to come from capital appreciation rather than rental yield). It will pay a 2 per cent annual dividend to investors, who must stump up a minimum £100,000.
The London buy-to-let market is a great place to be - if you can afford to get in. The rising property market means that last year the average UK amateur landlord enjoyed a 7.6 per cent annual return on th eir investment, according to figures released last week from LSL Property Services. In London, where property prices are now back to 2007 levels in some areas, performance has been even stronger, despite a cooling off in the corporate rental market.
CR Property Fund is not the first to target central London properties - we have previously written about uninspiring attempts by Candy & Candy and the London Central Residential Recovery Fund to bring products to market. However, British Land's involvement could give this fund real credibility - especially when one considers that up to 80 per cent of its investors are expected to hail from outside the UK.
By: Claer Barrett
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment