The Charities Property Fund marks its 10th anniversary with a return of 19.1% over the past 12 months (compared to a return of 18.9% by the IPD Pooled Property All Balanced Funds Index).
In just 10 years the Fund has grown to £357 million (approx. 405 million) with 1,142 charities as investors and continues to aim to deliver a high and secure level of income. Its current net yield of 7.0% is highly attractive to charities seeking income and compares favorably with the 5.0% per annum average dividend payable by the funds in the IPD Pooled Property Fund Index, 2.7% available on 10-year UK Gilts and 3.3% on the FTSE All Share Index.
The Fund is widely diversified with 50 properties let to high quality tenants on long leases with few voids. The vacancy rate is just 4.0% of rental value, well under the 10.1% in the IPD Index. In addition, 87% of the Fund's properties are secured on low/negligible risk covenants, compared with 69% in the IPD Index. Leases in the Fund have an average of 10.0 years to lease expiry, compared with an IPD Index average of 10.3 years.
Since 2009 the Fund has purchased 15 properties in eight separate transactions, taking advantage of opportunities that offer significant value. Purchases so far this year include the Apex Retail Park in Twickenham for £14.4 million; a Tesco Extra Store for £43 million in Mansfield; an office building in Bath for £6.9 million and an industrial unit in Nottingham for £5.4 million where the lease is guaranteed by Rolls Royce.
Harry de Ferry Foster, Fund Director, commented: "The key strength of the Charities Property Fund has been its ability to deliver a secure income stream over the last 10 years. That has made it very popular with charities, which in many cases have seen their income significantly affected by the financial crisis. We look forward to continued delivery of a high and stable income to our investors for the next decade and beyond."
Source: Citigate Dewe Rogerson