Mayfair Capital Investment Management’s flagship fund, the Property Income Trust for Charities (PITCH), has increased in size to GBP245m, having completed a further GBP12m of acquisitions.
PITCH has acquired three restaurant units on Greenwich Peninsula in south-east London for GBP5.7m from Greenwich Peninsula Retail, which is wholly-owned by Quintain.
The units comprise 8,872 sq ft of space and are let to Costa Coffee, Café Rouge and Chiquito at a combined rent of GBP355,000 per annum. All are secured on long-term leases ranging from 10 to 25 years. The yield to the fund is 6.2 per cent.
The units are located at Peninsula Square, which is undergoing significant urban regeneration to create a major residential and commercial community. DTZ advised Mayfair Capital and Jones Lang LaSalle advised Quintain.
PITCH has also acquired a GBP6.3m modern warehouse located at South Marston Distribution Park, Swindon, from Vantage, reflecting a yield to the fund of seven per cent. The 89,596 sq ft warehouse is let to Cap Gemini UK on a lease with 11.5 years unexpired at a passing rent of GBP403,200 per annum. Bushe Gower advised Mayfair Capital and Andrew Whitehouse Associates advised Vantage.
In addition to these acquisitions, PITCH has completed the sale of Bracken Trade Park in Bury, Greater Manchester, for GBP2.2m to a local investor. This reflects a 20 per cent return over the value and purchase at September 2013.
James Thornton, chief investment officer of Mayfair Capital and fund director of PITCH, says: “These acquisitions represent good value in the context of the market and offer further diversification within the portfolio, while enabling the Fund to continue to deliver an attractive yield of over 6.5 per cent.
“The PITCH portfolio is positioned well to continue to deliver its investment objective and current letting activity in hand will reduce the void rate from 5 per cent to less than 2.5 per cent.
“The market is enjoying the benefit of a strengthening economy whilst property is back in favour with institutional investors as an alternative to gilt and fixed interest investments, which look vulnerable to interest rate rises.”
Launched in January 2005, PITCH has consistently outperformed the AREF/IPD UK All- Balanced Property Funds Index, producing a total return of 47 per cent between 1 January 2005 and 31 December 2013. The fund is the best-performing balanced fund over the last five years in the AREF/IPD Index of 28 balanced funds, producing an 8.5 per cent annualised return (versus 5.0 per cent).
The fund attracted around GBP85m of new subscriptions in 2013, including the transfer of GBP24m of assets of the Multi Strategy Property Trust for Charities (MSPTC). MSPTC was a common investment fund previously managed by Cazenove Capital.
The transaction was carried out by way of an ‘in specie’ transfer, which involved investors in MSPTC switching into PITCH.