Ground Rents Income Fund has announced results for the year ended 30 September 2016. Over the period the fund’s NAV increased by 14.3% to 129.31p. the dividend for the year was 3.959p.
They say that RPI reviewable ground rents are particularly in demand. For those that review every 25 years with rents doubling, yields have dropped from 6% in March 2012 to 3.5% today. New acquisitions in the year include:
Fixed uplift portfolio
A new development of 123 apartments located in Canning Town, London, producing ground rent of £37k which represents an initial yield of 3.45%.
RPI linked portfolio
A number of RPI-linked assets comprising of the following: A new residential six storey block of 83 flats and 14 townhouses in Salford, a new residential three storey block of 66 apartments in Wakefield; two apartment blocks located in Reading, comprising 184 apartments; a mixed use long leasehold development in Warwickshire, comprising of 14 residential apartments and 2 commercial units; a mixed use freehold development in Cheshire, comprising of 8 residential apartments and 2 commercial units; the second phase of a portfolio of residential houses across 4 sites, the first phase of the portfolio having completed in the year to September 2015.
These assets are mostly linked to RPI with reviews ranging from 5 to 25 years, generating a combined ground rent of £0.68m, representing initial yields ranging from 2.85% to 3.70%.
Malcolm Naish, Chairman of Ground Rents Income Fund, said: “The market for ground rent investments is buoyant and values have increased significantly over the last 24 months, and our consolidated accounts for the year to 30 September 2016 reflect this. The trend of increasing market values coupled with a growing income each year, it is hoped, will have the intended effect of a growing net asset value.”
James Agar, Investment Director of Brooks Macdonald Funds, Alternative Investment Fund Manager to Ground Rents Income Fund, added: “The consolidated accounts are released during a period of relative stability in the UK commercial property market since the EU referendum result, helped not least by foreign investors attracted by the fall in Sterling against the US Dollar. Our investment strategy is focused on achieving stable, long-term performance by investing in long-dated ground rents, which have historically not suffered the same peaks and troughs as the economy and the wider property market.”
GRIO : Ground Rents sees big valuation uplift reflecting investor demand