James Agar

Brooks Macdonald adds to ground rent portfolio

Hale and Manchester-based Brooks Macdonald Funds has announced that its Channel Islands-listed Ground Rents Fund has purchased the ground rent of a new-build development in Bradford, West Yorkshire at a cost of £1.1m.

The Gatehaus apartment complex, situated on Leeds Road, consists of 142 residential units. The one, two and three bedroom apartments are located in three buildings around a central courtyard.

This acquisition is in line with the fund's strategy of purchasing quality ground rents and adds to the fund's current portfolio of long-dated, index-linked assets, which can be actively managed to drive performance. Currently the ground rents in the portfolio provide a total gross yield of 6.91%.

James Agar, development director of Brooks Macdonald Funds and sister company Braemar Estates, said: "We continue to acquire assets as a result of our close relationships with administrators and corporate clients such as PwC, who were appointed on this development. The most attractive aspect of this transaction is the five-year RPI provision which is contained within the leases. This provides the fund with a tighter inflation-linked cycle, increasing the hedging effect that the fund provides to investors in the current uncertain economic climate.

"We are very well positioned at the moment to complete on a number of large deals in Q1 and Q2 of this year, with our first acquisitions in central London. These transactions will allow the fund to be fully invested in the sector, reducing the cash drag on performance which we saw in 2011, and providing the fund with additional scale as we look to increase assets under management."

The fund is suitable for investment by offshore bonds, pensions, trusts, companies and individuals, and is widely available on most wraps and platforms.

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