Tritax, one of the UK’s largest independent property fund managers, has launched the Tritax Aberdeen Office Fund, which will provide its private investors with a high yielding, tax efficient investment in a new 40,000 sq ft, Grade A office development in Aberdeen.
The development has been pre-let on a 15 year lease to GDF Suez E&P UK Limited, a UK subsidiary of the world’s largest utility company. The lease contains a mechanism to hedge the investor against inflation, in the form of five yearly rent reviews providing guaranteed increases in income.
The fund has a targeted total return (IRR) of c.9.5 per cent p.a. and substantial capital allowances provide further value for UK taxpayers enhancing the pre-tax total return to c. 13 per cent plus p.a. for 45 per cent tax payers.
Aberdeen is the centre of the European energy industry and has overtaken London to become the only major city to have maintained positive economic growth throughout the broader recent downturn.
Colin Godfrey, partner at Tritax, says: “Against the prospect of higher levels of inflation and continued uncertainty in the UK economy, investors are continuing to turn to prime property as an investment option thanks to its ability to deliver stable, predictable and increasing income streams. With a modest amount of gearing this opportunity is providing income of c. 7.5 per cent p.a., which against the backdrop of record low bond yields is highly attractive.
“The key is sourcing assets in strong locations, let on long leases to financially robust tenants, such as that provided by the Tritax Aberdeen Office Fund.”