Property fund spends £100m in record month for acquisitions
The Glanmore Property Fund, one of the first open-ended property funds designed for private investors, is about to break through the £750m mark following a record month for acquisitions.
Niche investment agency Cardales, part of the Tilney Group and adviser to Glanmore's fund manager, Tilney Asset Management, completed four acquisitions during March, totalling almost £100m.
The two largest of the four purchases was the Turner Rise Retail Park in Colchester, Essex, which was bought for £28m, and the 171,000 sq ft (15,886 sq m) headquarters of foreign currency specialist Travelex in Peterborough, which was acquired for £31m.
The prices paid reflected net initial yields of 5.5% and 5.8% respectively. The fund portfolio now comprises 86 properties, including shops, offices, leisure centres and warehouses, spread across the UK.
Robert Court, Cardales' chief executive, said: ‘There is strong and consistent interest in our funds at the moment and, although it is becoming increasingly difficult to find good value stock, we're proving we can still satisfy the market appetite. The bigger the portfolio grows, the more we are able to diversify risk.
It's also reassuring for investors to see that the portfolio is well diversified in terms of property type, tenant and location.'
The record month for acquisitions and subscriptions coincides with the unveiling of the GlanEuro Property Fund, Tilney's first joint venture with Banif, the wealth management arm of the Spanish banking group, Santander.
The Dublin-domiciled fund, which is aimed at wealthy UK and European investors, has a minimum investment of €125,000 (£86,390) and will be 50% geared. Dividends will be driven by the rental income and capital appreciation of a varied portfolio of high-yielding assets from all property sectors.
Returns distributed to shareholders who are not resident in Ireland will only be subject to the relevant UK Income Tax rate and will not be subject to Irish Income Tax or Irish Capital Gains Tax. Investors will also be able to trade class A shares on a monthly basis.
Court added: ‘Santander and Banif were great fans of the Glanmore and British real estate funds but they couldn't access them because the Isle of Man and the Channel Islands are considered "fiscal paradises" in Spain, and are blacklisted by authorities as a result. So we designed a Dublin structure in order to satisfy their requirements.'
Banif has already invested ¤50m (£34.5m) in the fund as seed capital but Court hopes the relationship will lead to many millions more of investment, both from European private investors and British expats.
‘There are significant numbers of British investors living in Europe who have become comfortable with the euro as a currency, but who like investing in the UK because they see it as a secure place to put their money,' he said.
‘We've always been very keen to extend the distribution of our funds as far afield as possible mainly because a broad international investor base helps to keep the fund stable if sentiment changes in one particular market,' he said.