Investment Special: A New Year’s Resolution that you can keep
A recent straw poll of high earning professionals indicated that 80% are not implementing effective plans to optimise their investments and long term future earnings. The most frequently cited reason is that they are too busy “doing their day job”, leaving little or no time to devote to identifying the best investment opportunities available.
In the current economic environment, this has become even more of a headache. Most of those interviewed expressed a desire to keep away from volatile equity markets which are speculative at best and disastrous at worst. That means, of course, searching the market for good alternative investments. So whilst almost two thirds of those polled claim that one of their New Year’s resolutions each year is to sort out their long term investment strategy, it rarely gets implemented.
Of course, everyone knows that the most consistent feature of New Year resolutions is breaking them. However, of the myriad possibilities out there, there is one opportunity, which for many barristers, is comfortably close to home, entirely comprehensible and extremely easy to implement.
Residential property experts, London Central Portfolio (LCP), have just opened their third fund, London Central Apartments Limited for subscriptions. LCP has specialised for more than twenty years in the Westminster and Kensington and Chelsea boroughs that make up its core prime London Central focus and has acquired around half a billion pounds’ worth of assets for clients.
The new fund is targeting a return of 10%-13% per annum over a five year period. It will build a portfolio of individually selected and interior designed one and two bedroom apartments, which have greatest appeal to the corporate tenant market and generate the highest yields. LCP achieves an average occupancy above 96%. Returns will be generated though a combination of opportunistic buying, development uplift and capital appreciation.
Naomi Heaton, CEO of asset manager LCP, comments “Investors traditionally have bought into London for its lifestyle, trophy status and accessibility. However, as economic forecasts become increasingly unpredictable we are now seeing a new breed of investor. Investors who want exposure to a safe haven investment market which also offers long term upside potential. The limited supply of prime London real estate coupled with its global appeal, underpins its long term value”.
Since the onset of the credit crunch in October 2007, prime London property has significantly outperformed the FTSE 100. At the time of writing, the FTSE 100 is still down by 20%, although who knows where it will be when this article gets read! Meanwhile, London Central prices are up 14% over their pre-credit crunch high. Even taking into account the impact of the credit crisis, prices in this tiny six square mile area, surrounding Hyde Park, have risen by an average of 8.2% p.a.*over the last fifteen years.
London Central Apartments Limited will offer private investors exposure to a well-diversified portfolio in all of the recognised post codes which will be actively managed. Ideal both for those who are time poor and those who recognise the value of professional expertise.
The fund has been structured to optimise tax efficiency. For UK residents, gains should only be subject to CGT, which at its current 28% is very attractive for higher rate income tax payers, faced with spiralling tax bills. For non-doms, there should be no tax liability in the UK at all. As the first Sharia compliant fund investing in the London residential property market, it will have truly global reach, opening the market to Islamically sensitive investors.
LCP’s third fund launch follows the successful closes of The London Central Portfolio Property Fund in 2007 and The London Central Residential Recovery Fund in 2010. The last annual valuation of these funds in March 2011 showed a capital uplift of 26% and 20% respectively over the initial purchase prices.
This is the nearest thing to prime London real estate being offered to investors on a plate. And even if one of your other resolutions was to lose weight after the festive excesses, this is one dish you should certainly consider indulging in.
London Central Apartments - Key Features:
Target return: 10-13%
average annual growth
Target fund value: £50 million
Minimum investment: £50,000
Structured finance: Up
to 50% of purchase price fixed for the Investment Term, Sharia compliant
Investment Term: Closed ended fund running for 5 years (with 2 annual options to extend)
Listing: Channel Islands Stock Exchange, domiciled and regulated in Jersey
Eligibility: UK resident, non-resident and non-domiciled investors as well as SIPPs, SSASs and ISAs
For further information, follow this link or contact Naomi Heaton, Chief Executive of LCP or Hugh Best, Head of Investment Management on 020 7723 1733 or at fund@londoncentralportfolio.com
* HM Land Registry for the City of Westminster and the Royal Borough of Kensington and Chelsea, consolidated weighted averages.
Risk: Your attention is drawn to the risk warnings here... Any investment in the ordinary shares of any new property investment company carries a degree of risk of losing some or possibly all of your investment and whilst investors may wish to consider the positive past performance of London Central residential values, both long term and over the more recent credit squeeze, it is not necessarily a guide to the future.