Charities that have invested in the first property common investment fund have seen it outperform other pooled property funds by 3.3% in its first fully year, returning 10.3% for 2001 against an IPD average of 7% on the underlying property.
Since its launch in September 2000, The Charities Property Fund, managed by Savills Fund Management and Carr Sheppards Crosthwaite, has seen its portfolio go from strength to strength with the purchase of thirteen properties across the UK. It has attracted over 120 investors taking the total fund size to £48 million.
Alison Puhar of Savills Fund Management, Fund Director for The Charities Property Fund, comments: "We have built up a well-let portfolio of long income for The Charities Property Fund and I am delighted by the level of outperformance, especially as we have had purchase costs to take into account while the Fund is building up. The fact that the Fund does not pay stamp duty of course reduces those costs significantly. We believe that the outperformance and the fact that the Fund is now at almost £50 million will mean an acceleration in Fund growth over the next 12 months."
Charles Mesquita, a charity specialist at Carr Sheppards Crosthwaite, comments: "Property is a natural home for charities given the relatively high yield available compared with bonds and equities. It has been the best performing asset class over the past five years."
James Thornton, Head of Fund Management at FPDSavills, also points out that now is a good time for more charities to move into indirect property ownership and sell off under performing properties. He says: "By investing in a pooled property fund, such as The Charities Property Fund, investors can reduce management costs and gain exposure to a diversified portfolio of a wide range of property. The Fund's exemption from Stamp Duty means it is also a more tax efficient route for investment than the range of property unit trusts that are available."