A fund is claiming that investors who put money into real estate funds as an avenue of investment have seen a return of 11.5 per cent in the last year.
Alliance Fund analysed market data from 46 selected real estate funds, which typically pool investment in both residential and commercial real estate.
Alliance claims that this approach offers a number of advantages including the ability to spread risk, access to a greater diversity of portfolio opportunities and the foundation of professional fund management providing a more secure, hands-off approach.
The analysis by Alliance Fund shows that currently, the average Net Asset Value across the 46 funds is £1,272m, with M&G Secured Property Income Fund sitting top of the table with a NAV just shy of £4,674m.
On an annual basis, the average NAV value of these funds has grown by 11.1 per cent, with Alliance saying some have far exceeded that - for example, CBRE UK Long Income Fund os up 85.1 per cent in the last year.
Alliance chief executive Iain Crawford says: “From residential developments, to retail outlets, warehouses, sports grounds, listed buildings and everything in between, real estate funds provide the opportunity for investors at all levels to create an incredibly diverse, bespoke portfolio while minimising risk in the process.
“Although all investments carry an element of risk, the average return provided when investing in a real estate fund has been robust, to say the least, and the space is growing by the day to ensure investors have even further choice when investing.
“There are already some firmly established funds out there, but we’re also seeing the evolution of this avenue of investment, with many challenger funds bringing something new to the sector.
“Alliance Fund is just one such fund disrupting the sphere of real estate fund investment as, unlike many traditional funds, we do not invest fund capital into third party investments.
“We take an end to end approach by investing only in activities that we control, allowing us to reduce risk as the funder, developer and constructor.
“As a result, we can commit to delivering a substantially higher return than the norm even once the initial costs are subtracted and on average, our existing investors will enjoy minimum returns of 24% on their investment in 2023.
“In reality, this far higher margin is actually a worst case scenario and the more capital we raise the lower the total expense ratio becomes.”
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Return stats are meaningless if you don't know how much leverage they're employing or whether they're paying out any income as well.
What they have overlooked here is that our portfolio value has increase with the property prices AND we have received rent in addition.
Richard, my friend don’t mistake inflation for Property Value so it hasn’t increased the way portray it and we are being taxed on inflation.
Incidentally I read John Lewis has secured £500’000’000 funds from City investor’s, do Landlords still not believe we are being targeted and driven out for the Big Boys to take over. When were they ever involved in Residential Property and Letting apart from never.
Their Retail Business has hit the rocks so take over ours and Government is using legislation to Bankrupt us out of the way of Course there are plenty of other players moving in as well. Just avoid their expensive over priced Shops and Supermarkets
to give them a miserable Christmas they deserve it, give their shareholders something to think about.
Don't worry Michael. When you buy a bag of sugar at the supermarket, they bank the profit and move on to the next customer. When they start getting in tenants, they will realise that it's a totally different ballgame. Remember Lloyds Bank investing in a estate agencies, Black Horse Agencies, back in the 80s and 90s. Crashed and burnt and Lloyds shareholders were left nursing huge losses. I look forward to a retailer dealing with all those tenants. Blimey, stuff of nightmares!
I don't care what people say, being a professional landlord is a lifestyle choice as well as an income earning occupation. I have control over what I sink my money into, how I finance (leverage has been the landlord's greatest asset over the last decade if used prudently), who I let into my asset, when I sell my asset and of course the capital gain is mine after the taxman has his pound of flesh. I have a few quid in other investments but it's very hands off...
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