Property Fund for London Investment Launched

The British Property Opportunities Fund (BPOF) has launched a new share class to enable investors to invest exclusively in prime real estate in central London and take advantage of the substantial gap between supply and demand.

The London Growth Share Class aims to achieve long term capital growth from a market that remained robust even during the downturn in the rest of the UK. Much of this market strength can be attributed to the scarcity of supply, which was described last month as being at record lows.”

Horizon Asset Management, manager of the BPOF, believes that even the rise in stamp duty on luxury properties announced in the Budget will have limited impact on the market because of the strength of demand.

The Knight Frank Prime Central London Index rose by 20.47% over the two years to February 2012 and Horizon believes London property is set to remain attractive for at least five years or more. It is highly attractive to overseas cash buyers thanks to favourable currency rates, London’s ranking as one of the world’s leading cities and favourable tax treatment. This year’s Olympics and a shortage of trophy properties will also support prices.

‘The whole of London’s property market is going through a mini boom. Over the past two and a half years in particular, demand for purchasers and tenants has hit record levels, forcing rental yields up by more than 25% over that period. Because of this, many banks are still willing lenders for property in central London, which promises to continue to fuel the demand from property investors,’ said Bill McClintock, chairman of BPOF’s investment committee.

‘It therefore remains an attractive investment proposition for many UK and international investors, especially if they use an investment vehicle like London Growth that has no legacy issues from properties bought at the last cycle peak, so all new investments will be dedicated to optimising gains for investors,’ he added.

The London Growth share class has a 3% initial charge and a 1% annual management fee. The minimum investment is GBP 65,000 for direct investments or GBP 3,500 through a wrapper such as a platform or a personal portfolio bond.

The BPOF is an open ended investment company (OEIC) domiciled in the Cayman Islands. It invests in both residential and commercial property, including distressed portfolios, high yield rental units, development opportunities, leasebacks and reversionary gains schemes. It was launched on 01 February 2008 and by its third anniversary it had returned 15.99% net of all charges. In comparison, the Investment Management Association’s Property sector returned on average -7.11% over the same period.