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7% yield offered on Swip property fund

Scottish Widows Investment Partnership is to offer a property fund next month, offering investors a gross yield of 7 per cent a year.

The UK balanced property trust will be an investment trust listed on the London Stock Exchange. The offer period is set to run from February 11 to March 20.

Swip is looking to raise £150m from the offer and shares will be sold on a first come first served basis.

The fund is to be targeted primarily at Isa and selfinvested personal pension investors. It will be the fourth property investment trust to be launched in the past year.

The trust will be managed by Swip&#39s property fund team of 22, which is headed by Tom Laidlaw and already manages more than £4.4bn of property assets in the pension fund arena.

The portfolio will comprise around 60 UK properties, with 56.5 per cent of the fund in retail property, 33.4 per cent in offices and 10.1 per cent in industrial property.

The fund will pay income on a quarterly basis, equivalent to 7 per cent a year gross of tax and net of charges. Within an Isa, the yield will be 6.5 per cent net of charges. Minimum investment is £7,000 during the offer period. Commission is 3 per cent initial with no trail. The fund will have a total expense ratio of 1.5 per cent.

Head of retail investments Graham Campbell says: ” The trust offers outstanding investment opportunities for those who wish to invest at relatively low risk with a highly competitive yield paid quarterly. Personal investors can now add a direct commercial property investment to their tax sheltered savings.”

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