02 Feb 2012
Greggs sells like hot cakes; another triumph for syndicated commercial property
Custodian Capital, part of the Mattioli Woods group, has recently completed the funding of its latest property partnership at 98 Argyle Street, Glasgow. Investors raised over £1.4 million in denominations of between £10,000 and £50,000 to fund this popular investment, let to Greggs plc, in the city centre of Glasgow. This successful and fast expanding business has a lease for a further eleven years.
The partnership was structured as a deferred income partnership with a starting loan-to-value of only 24%. Five year, fixed rate debt was agreed at a cost of 3.7% per annum. This competitively priced debt, negotiated with Santander, will enhance returns in the medium to long-term. In the first five years of the partnership rental income is used to repay the initial loan and investors should benefit from a compound return on capital of over 5.5% per annum. Thereafter rental income is distributed to investors –forecast at 6.5% per annum in year six.
The partnership was launched two weeks before Christmas and was fully subscribed by the third week in January, demonstrating the strong demand for syndicated commercial property. The high income returns and long, secure and predictable income derived from commercial property remain popular in the context of the low returns and volatility of the wider economy.
Custodian Capital has just launched a new property opportunity in Macclesfield, Cheshire and is close to completing the funding of another in Redhill, Surrey. Further information on syndicated property can be found on our website.
Prospective investors and their appointed representatives who are interested in this investment model must seek their own independent financial advice from an appropriate adviser who is authorised and regulated by the Financial Services Authority. Mattioli Woods’ consultants are able to offer this service.
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