London Central Apartments II opens for subscriptions
London Central Portfolio’s (LCP) new Prime London residential property fund – its fourth in six years – is now open for subscriptions.
The fund is timed to take advantage of a notable increase in investor demand for this asset class. It follows in the wake of an additional share issue for their third fund, London Central Apartments (LCA), which was oversubscribed in just two days.
The mandate for this new fund, London Central Apartments II (LCAII), will duplicate the model of LCA. It will acquire a diversified portfolio of one and two bedroomed properties in all the prime postcodes surrounding Hyde Park which will then, in turn, be renovated and interior designed for rent to blue-chip tenants.
The five year fund is projecting an IRR of 10 per cent per annum and will be regulated and approved by the Jersey Financial Services Commission and the Channel Islands Stock Exchange. It is structured to be Sharia compliant, allowing it to be globally accessible to both conventional and ethical investors. The minimum subscription for LCAII is set at GBP85,000 although this reduces to GBP25,000 if invested through entities such as SIPPs, ISAs, QROPS and offshore portfolio bonds or through regulated nominees.
According to LCP, the property manager, LCAII already has a significant number of investors on the waiting list, including those who missed out on the second share issue of LCA. It will, however, be open to all interested parties on a first come, first serve basis.
Whilst performance figures have yet to be posted for their third fund, LCP’s previous funds have demonstrated strong results at their most recent valuations. Closed in 2007 and 2010, these funds have shown 41 per cent and 44 per cent increases respectively in capital value since acquisition. Whilst past performance is not a guide to the future, they are on track to achieve their target returns.
Naomi Heaton, chief executive of London Central Portfolio, says: “The new fund, LCAII, offers investors access to a high performing alternative asset class without the management responsibility and hassle of getting leverage, whilst providing the benefits of buying power and diversification which a single asset cannot provide.
“With the latest quarterly Land Registry Data showing average prices reaching GBP1,472,181, it also offers private investors access to all the best postcodes in Prime Central London at a fraction of the direct investment cost. Another bonus is the funds’ eligibility for various conventional savings vehicles, providing an attractive tax efficient investment at a time when cash is making no returns and people are struggling to allocate their pension pots and ISAs.
“As clearly evidenced by the speed of uptake for LCA’s additional 10 per cent share issue; Prime London Central residential has firmly carved its place in a balanced portfolio and is no longer looked upon as commercial property’s country cousin.
“We are delighted to be launching a new offering as investors finally wake up to the returns, longevity and diversification which Prime London residential property offers as an asset class.”