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Brooks Macdonald Funds completes first ground rents acquisition of 2012


Brooks Macdonald Funds’ Channel Islands-listed Ground Rents Fund has purchased the ground rent of a landmark new-build development in Bradford, West Yorkshire at a cost of GBP1.1m.

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 high 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. The Fund continues to produce a positive return for investors, consistent with the steady returns anticipated from this sector. Ground Rents provide secure, stable, low risk, low volatility and long-term income.

Currently the Ground Rents in the portfolio provide a total gross yield of 6.91%.

James Agar (pictured),Development Director of Brooks Macdonald Funds and Braemar Estates, says: “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 5 year RPI provision which is contained within the leases. This provides the Fund with a tighter inflation-linked cycle, increasing the hedging effect which 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.

This document has been approved for issue by Brooks Macdonald Funds Limited, which is authorised and regulated by the Financial Services Authority.


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