Indirect property investment is beginning to take off among charity investors, as demonstrated by the record number of investors in The Charities Property Fund during the final quarter of 2003.
The Charities Property Fund was the first common investment fund to offer all charities in England and Wales the opportunity of investing in the UK property market. Launched in September 2000, the pooled fund opens up the commercial property market to smaller charities that may not have had the buying power to create their own direct property portfolio. Instead of having to spend millions of pounds to enter the commercial property market, for a much smaller outlay charities can buy units in The Charities Property Fund and gain access to a large, well-diversified investment portfolio. For larger charities, the Fund offers an opportunity for tactical exposure.
Figures released today reveal that 48 new investors committed funds to The Charities Property Fund between October and December 2003 taking the total Fund value to just over £135 million. There are now 308 charities invested in The Charities Property Fund.
The first quarter of 2003 saw 11 new investors in The Charities Property Fund. During the second quarter, 23 new charities invested and during the third quarter there were 33 new investors taking the total to 115 charities for the year.
The investors in The Charities Property Fund will reap the benefits of a valuable asset class. Over the last ten years, property investments have outperformed gilts, UK equities and cash. Alison Puhar, Director of Savills Fund Management, predicts that property will perform strongly throughout 2004 and investors should see a total return of around 9 per cent during the year.
Ms Puhar says: "Property had been a forgotten asset class until The Charities Property Fund opened up the commercial property market to a wide range of charity investors. Now, increasing numbers of charities are becoming aware of the benefits of an investment in property. Property should be a part of a well-balanced charity portfolio as it provides a predictable income return and low volatility compared with other asset classes."
As property investment is a new concept to some charities, independent market research specialists The Charity Fund Partnership and The Charities Property Fund are conducting a biennial Charities Property Survey to help identify trends in property investment and promote good practice.
The researchers are asking all charities to spend ten minutes filling in the Charities Property Survey questionnaire. For a copy of the questionnaire contact Kate Dixon on 020 7597 1455 or email [email protected]. A summary of the results will be sent free of charge to all participants.