Close Brothers subsidiary Close Property Investment is building up its range of funds with the introduction of the active commercial estates (ACE) fund.
As an offshore unit trust registered in the Isle of Man, ACE is aimed at two types of investor. These are high net worth investors and those who have self-invested pension plan or small self-administered pension schemes and are looking to add an investment to them. The fund allows the investor to choose from income, growth or income and growth options.
ACE will invest in commercial property across the UK, including shops, shopping centres, warehouses, industrial buildings and offices, which can be bought and rented out. All of these properties will have an individual value of between £1m and £5m and the fund will aim for a yield of 6 per cent a year.
The UK commercial property market has seen steady growth over the last 30 years. According to commercial property research company the Investment Property Databank, between 1971 and 2000 the commercial property market saw an average level of growth of 12.3 per cent. Rental value growth has fluctuated, going from a high of 22.8 per cent in 1988 to -11.9 per cent in 1992 during the last property crash. In 2000 it was at 7.1 per cent.
According to Standard & Poors out of the nine Close Brothers funds available, one is first quartile, two are second quartile, two are third quartile and four are fourth quartile, based on £1,000 invested on a bid-to-bid basis with net income reinvested over one year to September 3, 2001.