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Property flourishes in Hotbed

Private investor network Hotbed claims it has achieved returns of 30 and 84 per cent by selling two commercial property investments.

Hotbed raised 6.15m for a warehouse in Milton Key- nes that it bought for 4.7m in June 2004 and 4.5m for a shopping centre in West Norfolk after buying it for 2.45m two years ago.

The supplier of alternative asset investments has so far bought eight commercial properties for 90m, using 20m equity with the rest as debt. In June 2004, it sold a Britsol development for 3.25m after buying for 2m in September 2003.

Hotbed was founded by a team led by Gary Robinson, a former director of 3I, the UK’s biggest venture capital company.

Head of property Simon Cooke says if it sold all its investments now, it would have doubled original investors’ money.

He says members can invest directly in a share of a commercial property in units of 25,000.

Cooke says: “Hotbed is building consistent proof that private investors can profit from using its investment model as a third way between investing indirectly through a fund or going it alone.”

Churchill Investments head of research Warren Perry believes such investments are high risk and should be handled with caution. He says: “I cannot see a place for these schemes in the industry and would steer investors towards more conventional commercial property funds, such as New Star or Threadneedle, which have shown good returns while also spreading risk across other asset classes.”

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