Assetz® News - Assetz announces new targeted property funds

Assetz announces new targeted property funds

8th November 2006 |

Property investment expert Assetz is following up its successful property fund for The Mill in Ipswich by introducing two additional funds.

A shared ownership fund for affordable homes and a new build student property fund come on the back of exceptionally high demand for investment in the development in East Anglia, a residential fund worth £77.5 million, due to close in three weeks.

Although aspirations for direct residential investment in pensions may have been quashed by this year's Finance Act, Stuart Law, Assetz's managing director urged investors not to be downbeat over investment opportunities in UK property.

"Assetz intends to continue designing and delivering genuinely diverse commercial vehicles," he said.

"[This allows] access to the more interesting and profitable residential property market sectors for both pension investors and private investors."

An interest to ethically minded investors in particular, Assetz is looking to raise up to £4 million to bring more properties onto the marketplace in East Anglia. The investment expert is working with one of the UK's leading affordable housing consultancies and a number of housing associations on a £10 million scheme which will offer 50 per cent shared equity to buyers.

The scheme plans to charge residents three per cent rent per year on the shared equity element and investor returns, which are delivered as growth rather than income to begin with, are expected to reach around eight per cent per annum.

A further fund focuses on the rising demand for student accommodation, a sector that Mr Law believes is "undergoing serious growth a more students attend university". The fund will provide developer finance for a 1,000-bedroom student scheme in Yorkshire, with a gross development value of £44 million.

Priority returns on this investment, which are not guaranteed, are estimated to be around 15 per cent compounded per year and above this profit level, there will be an additional profit share, potentially to be split between investors, the developer and the fund manager.

Mr Law insists that now is as good a time as any to be putting money into property: "The UK residential market is currently very strong and with the imbalance of supply and demand expected to take at least a decade to work its way out of the system, this growth looks set to continue."

However, he added that the new funds would capitalise on specific growth areas of the market.

"These funds are not targeting standard residential property, however, but instead specialist sectors, further increasing their growth potential. Demand for affordable housing is very much greater than for normal residential and the student sector is undergoing serious growth," he explained.