London Central Portfolio (LCP) has announced today that the additional share offering for their third fund, London Central Apartments (LCA), is now over-subscribed, just three weeks after launch. The number of additional shares on offer equated to 10% of the initial share issue and sold at the original price of Â£10 per share.
With the additional equity, LCA will continue to expand its portfolio of one and two bedroomed flats in the prime postcodes around Hyde Park. These are designed to appeal to the blue chip tenant, with the potential for a significant uplift in value.
“The mounting global interest in Prime Central London residential property as an asset class is increasingly evident. No longer commercial property’s poor relation, investors are clearly recognising the consistent returns and longevity that it offers as an investment vehicle. We are delighted at the speed of the uptake which has outperformed our expectations” comments Naomi Heaton, CEO of LCP.
LCP has also observed that their third fund has attracted a new breed of investor – with more than 50% of the uptake coming from the UK for the first time. Many are professionals who want to diversify their investment portfolios and get a foothold in this safe haven, as economic forecasts remain unpredictable. As base rates remain at a historical low (0.5%) and cash holdings are generating almost no returns, investors have taken particular advantage of the fund’s SIPP eligibility.
The biggest uptake in LCA after the UK domestic market is from Middle Eastern investors. With Islamic investment options increasingly important on the world stage, the fact that LCA is the UK’s first Sharia compliant residential property fund, has proved a significant draw.
Whilst performance figures have yet to be posted for the entire LCA portfolio, LCP’s previous funds have demonstrated exceptionally strong results at their most recent valuations. Closed in 2007 and 2010, these funds have shown 41% and 44% increases respectively in capital value since acquisition. Whilst past performance of their existing funds is not necessarily a guide to the future, they are on track to achieve their target returns of 10% and 15% p.a. respectively.
“In light of the very successful performances of the first two funds and the appetite for shares in LCA, LCP can also reveal that we will be rolling out the launch of our fourth fund imminently” concludes Heaton