View more on these topics

Julian Gibbs

Close Brothers always comes up with innovative property investment plans. One I particularly like is Fixed Uplift Properties, which invests in commercial property.

Since the Investment Property Databank started its index of commercial property 32 years ago, commercial property has risen by an average of 12.1 per cent a year.

Unlike property bonds, however, Close Brothers can enhance returns by using low-cost debt because it is now possible to borrow at a fixed rate of interest lower than the level of income from property, thus locking into current low interest rates.

What is particularly attractive about this fund is that it will only acquire properties where growth in the rental income is assured at an average minimum of 2.75 per cent a year. The fund will also only acquire properties let on long leases with more than 15 years remaining.

These measures seek to produce a low-risk fund, especially as the property will be diversified across a range of locations, sectors and tenants.

The prospective returns, assuming a conservative 3 per cent annual rental growth and an exit yield of 7 per cent, will be over 9 per cent a year to investors. If rental growth grows by 4 per cent a year and the exit yield is 6.5 per cent, then the return will be over 13 per cent a year.

The value of the portfolio should rise as the fixed rental increases take effect while active management may produce rewards in the form of extra income or capital growth. These benefits should be a bonus on top of whatever market appreciation takes place.

There is, of course, some risk in the unlikely event of properties of this type falling in value, in which case there could be a loss. It is a six-year capital growth investment, after which time the properties will be sold.


Iimia – Iimia Investment Trust

Type: Investment trust Aim: Growth by investing in investment trusts Minimum investment: Lump sum £5,000 Investment split: Up to 100% in investment trusts, remainder in cash Types of shares: Ordinary Isa link: Yes Pep transfers: Yes Charges: Annual 0.5%, performance fee 15% Commission: None Tel: 01202 766755

Penrose Report to be revealed on Monday

Publication of the long awaited Penrose report into what went wrong at Equitable Life is finally to take place in full on Monday. Financial secretary Ruth Kelly is also to make a statement to Parliament about the report on the same day. The 818-page report has been with the Treasury since December and has been […]

Chartwell teams up with Pinnacle to offer 4.33 per cent on GIB

Chartwell Investment Management has teamed up with Pinnacle Insurance to offer investors 4.33% p.a. net of basic rate tax on its 3 year guaranteed income bond. This is equivalent to 5.41% gross for basic rate taxpayers and 5.77% gross for higher rate taxpayers. The rate is available for a minimum investment of £10,000 on a […]

L&G has the cure after NU fails medical

I am an IFA and wrote a policy on myself and my wife. Here is how the story goes. I have just bought a house and need life cover. With five weeks to completion of contracts, we take out the life cover with Norwich Union for £210,000. With three weeks to completion of contracts, Norwich […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm