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Keydata says criticism of its US property bond ‘missed point’

Keydata sales director Mark Owen has dismissed research by IFA AWD Chase De Vere which criticised the group’s income property bond.

AWD research manager Justine Fearns said Keydata’s six-year residential bond might struggle to find suitable investments to renovate in time to establish sufficient stable revenue streams from the US residential properties it is targeting.

The research suggested that general property returns are likely to reduce in future and investors should treat property as a diversifier, not a get-rich-quick scheme. AWD recommended three alternative UK property funds from M&G, Norwich Union and Scottish Widows Investment Partners.

Owen says AWD missed the fact that the Keydata fund has already bought its first two properties in Orlando and Washington DC. He adds that the negativity around future returns in the UK market ignores the fact that the fund is in US residential property which is tipped to outperform the UK.

The bond matures in November 2012 and offers a fixed annual income of 7 per cent or quarterly income of 1.75 per cent.

A Keydata spokesman says: “They are saying investors need to diversify away from UK property and then recommend three alternative UK property funds. This is in the US market.”

Owen says: “AWD has missed the point. The bond is already seeded with the first thousand units in two locations. These properties are already 85 per cent let so stabilisation only needs to be carried out on the vacant units.”

“The research cites comments from NU saying do not move any more money into UK property but look elsewhere. We are looking for a sensible return from stabilised properties with the right yields.”

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