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Central London

RESIDENTIAL INVESTMENT FUND

CENTRAL LONDON

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Executive Summary

We have set out brief details of an opportunity to invest in a closed ended company purchasing a portfolio of up to 50 exclusive residential properties in Prime London Central which will be actively and professionally managed.

Acquisitions will focus on compelling capital growth opportunities, targeting a total return of 10 - 13% p.a. over a 5 year term (subject to up to two annual extensions with the approval of a majority of investors). .

The properties acquired will be 1 and 2 bedroom apartments which appeal most to the corporate tenant. They will be renovated and interior designed to add value and generate immediate rental returns of around 5% p.a. With average occupancy rates in the existing portfolios managed by the Asset Manager running at 95% for the past 10 years, this will provide a consistent income stream. .

The company intends to raise £50m. This will be pursuant to an Offer to subscribe for Ordinary Shares of around £30m and Shariah compliant structured finance of £20m is arranged on favourable terms for a 5 year period. The company will be based offshore to provide tax benefits and will be listed on the Channel Islands Stock Exchange. .

At maturity, the portfolio will be divested in a manner to maximise returns; property by property or as a portfolio.

Post fees, costs and taxes. Please note that projections or forecasts are subject to many assumptions, some of which may not come to pass. The investment objectives may not be achieved.

These projections* are based respectively on:

•  8.5% growth p.a. which is equal to the average seen in Central London over the last 15 years and;
•  10.8% p.a. the predicted growth rate for market pricing to return to long term averages by 2017, following price falls in 2008/9.

About the Asset Manager

Established in 1990 and has an estimated £300m of residential assets under management in Prime London Central.

Unique service dedicated to maximising investors’ profit opportunity. Based on sophisticated financial modelling, it sources, buys, refurbishes, furnishes, lets and handles the rental management, all in-house. The senior management team has over 75 years combined market experience.

Has invested in residential property in Prime London Central on behalf of third parties for over 20 years. A leader in this field, the growth in value of the managed portfolio has outperformed the general market by over 50% since 2000*.

The only company to have successfully brought two closed ended investment companies to the market in the last few years, providing a wide spread of investors access to this exclusive market place.

Key Features
Structure Closed ended investment company, domiciled in Jersey and listed on CISX
Investment Objective Capital appreciation: 10-13% IRR
Target Size £50m (£30m equity, £20m shariah compliant structured finance)
Term 5 Years (subject to two annual extensions with the approval of majority of investors)
Minimum Subscription £50,000
AMC 1%
Eligibility UK resident, non-resident and non-domiciled investors, SIPPs, SSASs and ISAs

Market Commentary

Overall, residential property in London has seen average price growth of 10.6% p.a. over the last 40 years. Whilst past performance is not a guide to the future, it is the Asset Manager’s opinion that this growth will continue in Prime London Central. This is supported by independent price growth forecasts.

Home to some of the most exclusive and best-known addresses, the international appeal of Prime London Central continues unabated. Located over just 6 square miles, there is almost no more land available to develop. As a result, there is little scope for high rise buildings and only about 500 new units come on to the market each year. This lack of new stock puts pressure on supply and therefore prices. Average prices in London Central are five times higher than the UK market. Its performance bears little correlation to the rest of the country.

London Fund Focus Area

London hosted the Olympic Games in 2012. Prime London Central, the ‘West End’, was the venue for many of the events. It benefited from significant investment in its amenities, architecture and infrastructure to make it a showcase to the world. These benefits have remained long after 2012. Since the successful bid in 2005, average prices in London Central have already increased by 60%, compared with 5% around the Olympic Village, located in London’s ‘East End’.

The London Central residential market is seen as a safe haven investment with global appeal which favours long term asset value growth and consistent rental yields. Post credit crunch, its recovery was far more rapid than other asset classes. However, the recent dampening of prices resulting from the credit squeeze presents significant buying opportunities for those who access the market now.

*HM Land Registry **CML, ODPM, OCLG

The information contained in this advertisement is in summary form and is not complete and is subject in all respects to the associated placement memorandum issued by The Fund and approved as a financial promotion under Section 21 of the Financial Services and Markets Act 2000 by LLP Services Limited (authorised and regulated by the Financial Services Authority in the UK).

Prospective investors should be aware that investment in the fund involves a high degree of risk. The value of an investment in the fund may go down as well as up and investors may not get back the amount originally invested. The investment may be illiquid until the fund is wound up after eight years. Prospective investors should review the “Risk Factors” set out in the placement memorandum. LCP is not authorised to give any investment advice to individual investors and if you require such advice it is recommended that you should contact your Financial Advisor.

This unregulated exchange traded fund is not regulated in Jersey. The Jersey Financial Services Commission has neither evaluated nor approved: (a) the scheme or arrangement of the fund; (b) the parties involved in the promotion, management or administration of the fund; or (c) this prospectus. The Jersey Financial Services Commission has no ongoing responsibility to monitor the performance of the fund, to supervise the management of the fund or to protect the interests of investors in the fund. Application has been made for the listing of the ordinary shares of the fund on the Channel Islands Stock Exchange.

Any reference to the London Olympics in 2012 is merely referring to the fact that it is taking place and not any endorsement or recommendation of the fund by the Olympic Delivery Authority or the British Olympic Association.

1% over the base rate is that of the specific financier of the Fund. The Sterling base rate of the financier of the Fund is normally identical to the Bank of England's base rate, or if it is commercially viable, the Fund can also fix its interest rates over LIBOR.

 

London Fund Disclaimer

Important Information:

The information contained in this advertisement is in summary form and is not complete and is subject in all respects to the associated placement memorandum issued by The Fund and approved as a financial promotion under Section 21 of the Financial Services and Markets Act 2000 by LLP Services Limited (authorised and regulated by the Financial Services Authority in the UK).

Prospective investors should be aware that investment in the fund involves a high degree of risk. The value of an investment in the fund may go down as well as up and investors may not get back the amount originally invested. The investment may be illiquid until the fund is wound up after eight years. Prospective investors should review the “Risk Factors” set out in the placement memorandum. LCP is not authorised to give any investment advice to individual investors and if you require such advice it is recommended that you should contact your Financial Advisor.

This unregulated exchange traded fund is not regulated in Jersey. The Jersey Financial Services Commission has neither evaluated nor approved: (a) the scheme or arrangement of the fund; (b) the parties involved in the promotion, management or administration of the fund; or (c) this prospectus. The Jersey Financial Services Commission has no ongoing responsibility to monitor the performance of the fund, to supervise the management of the fund or to protect the interests of investors in the fund. Application has been made for the listing of the ordinary shares of the fund on the Channel Islands Stock Exchange.

Any reference to the London Olympics in 2012 is merely referring to the fact that it is taking place and not any endorsement or recommendation of the fund by the Olympic Delivery Authority or the British Olympic Association.

1% over the base rate is that of the specific financier of the Fund. The Sterling base rate of the financier of the Fund is normally identical to the Bank of England's base rate, or if it is commercially viable, the Fund can also fix its interest rates over LIBOR.

 
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