Smith & Williamson looks to residential property

Smith & Williamson today announced the launch of Dualinvest, a two- or three-year closed-ended unit trust investing in British residential property.

Dualinvest plans to raise a maximum of £25m to invest in residential property held by developers and housebuilders and has already sourced over £10m of property stock, over which it has taken options. The trust has set itself a minimum subscription level of £4m to proceed.

Dualinvest will acquire a 65% interest in these residential properties, mainly from corporate vendors. A two-year lease agreement will be entered into with the vendors to provide a coupon of 13.5% to unit holders during the first year, intending to equate to a cumulative income return of at least 7% a year during the life of the fund.

The unit trust is structured so as to provide a downside safeguard of up to 30% whereby investors’ capital is protected, provided the net sale proceeds from the properties are not 30% lower than the valuation of the properties at the time of purchase.

Investors will invest in income units that will be listed on the Channel Islands Stock Exchange. British taxpayers investing in Dualinvest through a Sipp or Ssas should be eligible for relief from income and capital gains tax.

The minimum individual investment is £10,000.

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