Close Property Investment is targeting the retirement market with the Capital Appreciation Trust (CAT).
CAT is a Guernsey based open ended investment company which is aiming for growth by investing in UK residential property.
It will invest in the retirement accommodation market, buying vacant self-catering retirement flats in retirement complexes, refurbishing them and then charging new tenants a lump sum equivalent to five years rent in return for a lifetime lease. The funds acquired by CAT will be used to purchase new properties.
By listing CAT on the Luxemburg stock exchange, Close Property Investment has made it available to investors operating self invested personal pensions or small self administered schemes, who would otherwise be unable in invest in residential property. Other potential investors targeted by CAT are expatriates.
Although this is a low risk investment it does rely on property values remaining at about the same levels as time goes by. However retirement homes are a growing area at the moment, due to the increasing numbers of pensioners in the UK and this is an area of potential growth.
According to Standard & Poor's the Close UK Escalator 100 fund is ranked 5 out of 12 funds, based on £1,000 invested on a bid-to-bid basis with net income reinvested over three years to August 1, 2000.