The Charities Property Fund has aquired five new properties for almost £60m in quarter three, bringing its Net Asset Value to £456m.
The fund was the first common investment fund available to all charities in England and Wales that invests directly in commercial property. In its 11th year, the Fund has so far acquired sixteen assets and sold three, in sixteen separate transactions totalling over £140m. This is almost twice as active as 2010 when the fund acquired eight properties and sold two in transactions totalling almost £100m. It now currently holds 66 properties let on long leases.
This latest batch of purchases reflects an average yield to the fund of 6.9 per cent. With an average lease length of 20 years, the properties include a retail warehouse park which is currently host to B&Q, B&M, Pets at Home, Argos, Brantano, Carpetright, KFC and Frankie & Benny's; a Tesco supermarket in Nailsea; two industrial units in Wellingborough and Telford, and the funding of a new Travelodge hotel in Cambridge.
The Fund returned 2.8 per cent in the third quarter of 2011, and 9.3 per cent over the past twelve months to 30 September.
Around 85 per cent of the Fund's assets are secured on covenants rated as low risk, and compared to the Investment Property Databank, 89 per cent of funds in its databank are considered higher risk. The Fund currently has 1,239 charities as investors.
Speaking of the Fund's successful run, Harry de Ferry Foster, Charities Property Fund director, said: "The Charities Property Fund's popularity is primarily due to its strong performance, which has been particularly good over the last three years despite the Fund doubling in size and the associated transaction costs and valuation drag on new purchases.
"But the Fund also offers outstanding diversification in terms of assets, locations and tenants. We add value through active management (including lease extensions and refurbishments), while preserving a high sustainable level of income by holding good quality assets in the right sectors. This makes the Fund very defensive, as does our aversion to speculative development projects and gearing."
