These include: a relatively high return; minimal costs of ownership (tenants are usually liable for the cost of repairs and insurance); the ability to borrow money against the assets being acquired; and a reliable cash flow, assuming that the tenant is of a reasonable covenant and trading successfully.
Recently more and more investors have been moving into this sector and the consequence has been a significant increase in prices and a lower return on the capital invested -- to such an extent that we have found it difficult to find suitable property purchases for our private clients to acquire.
The alternative for private investors is to invest in a pooled scheme. The advantages of pooled schemes include a lower financial entry threshold, a wider spread of risk across a portfolio and a greater diversity both by sector and location. Pooled schemes also offer professional asset management and usually offer tax transparency, through the use of Scottish Limited Partnerships
CKD Galbraith is the appointed property manager for two such schemes: the Private Property Fund, which will, once fully invested, have a portfolio value of circa 40 million; and the Dundas Commercial Property Fund I which will have a portfolio valued at approximately 10 million.
We have also been appointed as the property managers to the new Dundas Commercial Property Fund II, which is currently being launched and is anticipated will have a portfolio value of between 20 million and 40 million, depending on the level of subscription. The fund will invest in high yielding property requiring active asset management.For more information speak to Richard Higgins who heads up the Investment team.