City Island

Ladywell Point acquired by ground rent fund

Simon Donohue

Three blocks of residential apartments in Salford are among the latest investments for the Ground Rents Income Fund, a listed real estate investment trust investing in UK ground rents.

Providing a trading update for the period covering 1 April to 31 August 2013, the fund's managers said it had acquired Ladywell Point, Salford, for £2.7m. The property comprises 262 units in three blocks.

In total, £7.5m was invested in the period in six transactions totalling more than 1,000 units. Other investments include City Island, Leeds, which was acquired for £1.4m.

The proceeds of an IPO which raised £50m in August last year have now been fully invested. GRIF raised a further £38.6m through a new share placing in May and has indicated that it might return to the market for further funding before the end of the year.

A dividend of 2.8p per share is being paid for the period covering the IPO on 13 August 2012 and 30 September 2013. A convertible preference share dividend of 0.7p per share has been declared for the period from 25 May 2013 to 30 September 2013.

GRIF's portfolio is managed by Hale-based Braemar Estates. The fund is advised by Brooks Macdonald. Its portfolio includes

James Agar, investment director of Brooks Macdonald Funds, said: "The company has completed a number of sizeable deals over the last few months, including City Island, Leeds, and Ladywell Point, Salford, adding more than 9,000 units to GRIF's portfolio.

"When GRIF was designed, we were very clear that we did not want it to be a residential-only ground rents vehicle, like the others which existed in the market.

"There are significant opportunities to deliver enhanced yields outside the traditional residential market, whilst continuing to provide predictable returns with assets linked to inflation that also have 'gilt-like' security characteristics.

"This opportunity for increased yield has been evidenced by the recent completion of a number of deals in both the hotel and student accommodation sectors. These assets have been added to the portfolio to drive gross dividend yield, whilst continuing to maintain our core investment characteristics.

"We continue to have excellent visibility and deal flow on the deployment of the remaining funds raised from the convertible preference share issue, which we would anticipate being invested within the 12 month timescale set at issue."

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