STRUTT & PARKER REAL ESTATE FINANCIAL SERVICES
Sprefs Commercial Property Fund
Growth and income by investing in UK commercial property
Lump sum £15,000, Isa £3,000
19.7% industrial, 25.3% offices, 55% retail
Place of registration:
Initial 5%, annual 1.25%
Tel: 0870 420 5511
Strutt & Parker Real Estate Financial Services has designed the Sprefs UK commercial Property fund, a commercial property fund for retail investors with small amounts. It invests in an institutional fund, the Deutsche UK managed property fund which in turn invests in three sector-specific Deutsche property funds.
City Asset Management director Anton Robinson thinks this fund will find a place in the market because there is currently a shortage of good property portfolios with low minimum investment levels. He says: “Although £15,000 is a high minimum, presumably you can buy for less in the secondary market. There is also a lower minimum of £3,000 through an Isa.”
Robinson draws attention to several features he likes about the fund. He regards the yield as attractive and welcomes the ability for advisers to choose a level of commission up to 3%. He also mentions that the underlying Deutsche fund has a good past performance record.
However, on the downside, he expresses concern that the underlying portfolio of 640 properties will be labour intensive for the underlying managers and very costly to value. He adds: “The portfolio is exposed to a downturn in the south and the asset mix is very close to the benchmark. It does not appear that the price of the fund will be quoted in the Financial Times and the prospectus, at over 50 pages, takes too long to download from the website.”
Robinson thinks Sipps and SSAS investors will look at funds from Standard Life and UBS and can see competition for the Sprefs fund also coming from existing property funds listed on the stock exchange. However, he says these funds are more likely to be geared.
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Good