….. with a seed portfolio of 50 properties targeting PCL's Private Rented Sector
The tax increases on residential property introduced in successive UK Budgets may have made properties in the capital worth more than £1m even more eye-wateringly expensive. But that does not mean you can’t enjoy the rewards of becoming a property magnate.
LCP has just announced the launch of their “super” fund, London Central Apartments III (LCA III). Like their other funds, LCA III is a publicly quoted company that invests exclusively in the mainstream private rented sector in Prime Central London. However, unlike its other funds, this latest opportunity offers investors shares in a seed portfolio of around 50 properties across some of the capital’s most desirable postcodes.
Making a large portfolio available from the beginning of the investment cycle presents a particularly exciting opportunity to investors. Not only will investors’ shares be clocking up capital returns immediately, but the portfolio provides a tangible, existing asset base with a proven track record and secure tenant covenants.
After the planned equity raise, LCP will continue to expand the portfolio, acquiring, renovating, letting and managing a combination of studio, one- and two-bedroom units.
These smaller properties form the bedrock of Prime Central London’s rental market and are attractively priced at a level where the recent changes in stamp duty rates helps, rather than hurts. As the properties are being let on a commercial basis – primarily to blue-chip tenants, they also do not fall foul of the Annual Tax on Enveloped Dwellings, which takes aim at owner-occupiers.
Investors’ interests may be further piqued by the fact that the “genuine diversity of ownership” of LCA III means it is exempt from a slew of new taxes which buyers acting on their own will now pay. It is free from both the new capital gains charges levied on non-residents and the non-domiciled inheritance tax soon to be applied to all privately owned residential property in the UK, whether or not it is held in an offshore vehicle. As an investment company, it will benefit from lower levels of tax on rental income than those imposed upon private landlords. British investors can also enjoy tax benefits by investing through their SIPPs and ISAs.
LCA III is targeting a £100m fund raise and is projecting returns in excess of 10% per annum over a five-year period. It is regulated by the Guernsey Financial Services Commission and is listed on the Channel Islands Securities Exchange.
While the minimum subscription is set at £75,000 for direct investors, there is no similar limit for investment into this vehicle when made through a regulated entity such as the manager of a SIPP, SSAS or an ISA. LCA III is also sharia-compliant.