Insight Investment announces today the launch of a listed property investment company, Insight Foundation Property Trust Limited, in July. The size of the property portfolio at launch is expected to be over £293m. with a target of £400m. gross asset value when fully invested. Insight is raising approximately £250m. of equity.
This new investment opportunity, which is expected to appeal to both institutional and retail investors, will be a Guernsey domiciled, closed-ended property investment company, managed by Insight Investment Management (Global) Limited. The ordinary shares will be listed on both the Channel Islands and London Stock Exchanges.
The underlying portfolio of commercial property in the office, retail and industrial sectors will be actively managed by the 43 strong Insight property team, who currently manage £4.6 billion of property assets. Members of the team have strong performance track records established in managing other investment trusts and funds.
Insight Foundation Property Trust is expected to provide a dividend of around 6.75 pence per share (gross) a year whilst growing capital in the medium to long term through active management. It is intended that gearing will be approximately 35% of total asset value.
The Insight Foundation Property Trust will invest in a diversified portfolio of UK commercial properties and will acquire property portfolios totalling nearly £293 million at launch. The majority of these assets will come from Clerical Medical who will be supporting the launch by taking an equity stake in the fund equal to the assets they are transferring. There will be approximately 64 properties in the portfolio with an average capital value of about £4.4m. It is intended to purchase up to a further £100m. of property as soon as practicable thereafter.
Announcing this launch, Duncan Owen, managing director of Insight’s property business, said, “We are responding to an emerging trend in the UK marketplace and believe there will be a real appetite for investment in this company, particularly as the £220 billion UK commercial property market continues to produce consistent growth. What differentiates this fund offering is that it should be larger, more diverse and offer a higher income yield than many other investment opportunities available to both retail and institutional investors. Commercial property offers good diversification. It is an asset class with characteristics of both bonds and equities.
Over the last ten years the income return has been approximately double that of gilts and the capital return has been slightly over 3% a year. We believe this new opportunity will appeal to investors seeking high income yield from a lower risk fund as part of a well-diversified portfolio. “
The minimum subscription under the offer will be £2,000 and the ordinary shares will be eligible for inclusion in the stocks and shares component of an ISA and can be held in PEPs, as well as SIPPS and SSAS investments.
Working alongside Insight in the development of the Insight Foundation Property Trust are Cazenove & Co. Ltd (sponsor and broker), Herbert Smith (lawyers) and Knight Frank (independent valuer to the fund).
Source: Insight Investment
