London Central Portfolio has launched its third prime London residential property fund as investors take flight to tangible assets, prompted by world leaders’ talk of “dangerous times”.
The London residential property specialist said that the prime London residential market continues to hold its appeal. According to government statistics for the two most exclusive London boroughs, the City of Westminster and the Royal Borough of Kensington & Chelsea, prices have risen 26% since February 2009.
“Since the onset of market turbulence in October 2007, prime London property has outshone the FTSE 100,” said Naomi Heaton, CEO of LCP.
“The FTSE is down by 20% whilst London Central prices are up 10% over their pre-credit crunch high. Even taking into account the impact of the credit crisis, prices in this tiny six square mile area have risen by an average of 8.2% pa over the last fifteen years.”
LCP’s launch of its third prime London residential fund, London Central Apartments Limited, is timed to take advantage of investor demand for alternative assets with track record. The asset manager, which already has around half a billion pounds of prime property assets under management, is looking to raise £50million with a target IRR of 10-13% per annum, over a five year period. It will also be the first Shariah compliant fund in the UK investing in prime London property.
Heaton added: “Our new fund will offer institutional and private investors access to a professionally managed and diversified portfolio in all of the recognised prime London postcodes. Investors are keener than ever to put their money in tangible assets as economic forecasts become increasingly unpredictable.
“The world’s super rich are viewing prime London residential property in much the same way as they do gold and there is limited supply of both. However, we are also seeing a new breed of first time investors attracted to this fund. These range from professionals priced out of the London property market but who want to get a foothold and parents seeking to keep pace with the market and effectively secure a deposit for their children later in life.”
The fund is eligible for SIPPs and SASSs, providing an attractive tax efficient investment opportunity at a time when people are struggling to allocate their pension pots. Gains from the fund will also be subject to CGT which, at its current 28%, is attractive for higher rate UK taxpayers who are faced with 40% or 50% cent income tax.
For non-doms there should be no tax at all and as the first Shariah-compliant fund investing in the London residential property market, it will have truly global reach and open the market to ethical investors.
This third fund 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 according to LCP.