Cordea Savills announces the purchase of its first asset, a development of 27 apartments in central Portsmouth for approximately €7 million (£4.6 million), for the Diversified Residential Property Fund Limited (the Diverse Fund). The fund, which focuses on residential sectors offering security of income, purchased the development on a sale and leaseback basis from developer Crest Nicholson at a yield of 6.5%.
The development is located in central Portsmouth, within easy reach of the train station and is only half a mile from the waterfront and the new leisure and retail facilities at Gun Wharf Quays. The acquisition is part of a wider development, which includes 569 residential apartments, retail units, a concierge service, decked interior garden and car parking. The purchase comprises two studios, eighteen one-bed flats, five two-bed flats and two three-bed flats. Floor areas range from 365 ft² to 1,012 ft², with a total area of 14,835 ft².
As well as purchasing residential units from developers, the Diverse Fund targets long lease properties to tenants with good credit quality (eg. Housing Associations, NHS Trusts, etc), student accommodation, hotels and any other properties which fulfil its investment objectives, namely income security and growth potential based on the residential market.
Steve Taylor, Head of Wealth Management comments, This acquisition represents just one of the ways in which the Diverse Fund will source longer, more secure income streams. With little opportunity for value currently available in the commercial sector, we believe certain sectors of the residential market are set to perform well in the medium term.
Source: Cordea Savills