Braemar launches off-shore ground rent fund

Hale-based property fund manager Braemar Group, listed on the AIM stock exchange, has started trading at its new Ground Rents Open Ended Investment Company.

The new fund is due to be listed on the Channel Islands Stock Exchange and will offer investors exposure to the UK ground rents market.

Marc Duschenes, chief executive of Braemar, said the ground rent fund had already made three acquisitions.

He added: "At a time when returns on cash are at historic lows, we feel that the security that ground rents offer is expected to play a major part in investors' overall wealth management strategy.

"Following on from the success that our recently launched student accommodation fund has delivered to unit holders, I am sure that our approach to investment in British real estate assets will earn a deserved place in client portfolios."

Braemar manages £250m of property and has listed student accommodation and agricultural land funds.

Duschenes said the new fund would acquire the freeholds and head leases of well-located residential, retail and commercial properties, which have a pre-determined and often inflationary long-term income stream from ground rents.

Ground rents are a form of long lease in which unimproved land is leased in order to undergo development. Braemar said ground rent was amongst the most secure type of property investment due to the low risk of default and secure yield.

Braemar intends to distribute at least 85% of the net income of the cell by way of one interim dividend paid annually no later than 30 September, commencing in 2010. Any gearing in the fund will be for liquidity purposes only and will not exceed 20% of the market value of the portfolio.

The first dealing date for the OEIC is 29 May 2009, with the deadline for applications being 22 May 2009.