Mayfair Capital’s Property Income Trust for Charities (PITCH) has completed £16 million worth of acquisitions in three separate deals.
The largest transaction saw PITCH take ownership of a Travelodge hotel located at 14-18 Queens Road in Norwich (pictured) from Aviva Investors Pensions Limited, with the £8.7 million price tag representing an initial yield of 5.5 per cent. However, this is set to rise to an expected 6.2 per cent in November, coinciding with an RPI-linked rent increase during the same month.
At present the passing rent amounts to £485,460 per annum and is generated by the tenancies of both Travelodge, which is due to occupy the property until November 2039, and Bathstore.com which occupies a unit on the ground floor. During negotiations, JLL acted on behalf of Aviva and Steadman Brierley and Savills represented PITCH.
The second acquisition was that of a modern office building in Milton Keynes from an Oxbridge College and the purchase price of £4.0 million, which represents a yield of 8.0 per cent, was satisfied through the issue of new units in PITCH. Located at Eastlake Park, the property is currently let until March 2020 to Omron Electrics, generating a rent of £325,000 per annum.
Finally, PITCH gained ownership of a £3.3 million industrial building from a national charity, the purchase price of which was satisfied partly in cash and, again, partly through the issue of new units in PITCH. The property, located at Southmoor Lane in Havant, Hampshire, represents a yield of 7.0 per cent and is let to Lewmar Limited until June 2030 at a rent of £230,000 per annum.
Chief executive of Mayfair Capital and the fund director of PITCH James Thornton believes that the prevalent strength of the charity fund has helped to attract new investors.
He says; “PITCH is continuing to see positive inflows of money in response to its outperformance and attractive yield.
“The fact that the vendors of the Milton Keynes and Havant properties wanted to receive units in PITCH as consideration reflects their continuing commitment to real estate as an asset class whilst diversifying their exposure into a fund holding over 60 assets.
“These latest acquisitions are in line with our investment strategy for PITCH, providing secure and long-term income growth.”
Since its launch in January 2005, PITCH has consistently outperformed the AREF/IPD UK All-Balanced Property Funds Index (ABPFI) over 3, 5 and 10 years to the 30th June 2015, making it one of the most successful performance-beating charity funds in the UK at present. Furthermore, since its inception, it has managed to produce a total return of 86.2 per cent through clever investment into key assets.
It is hardly surprising, then, that a current yield for the rolling 12 months of 6.4 per cent has helped to attract new equity from charities. In fact, the fund gained £87 million of new subscriptions in the 12 months to the end of June 2015, a performance it hopes to once again top in the year to come.
