GARY RHODES Star Gazing - Mayfair Times

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property
INVESTING IN PROPERTY IS THE NAME
OF THE GAME IN MAYFAIR – WHETHER
IT’S FOR A VERY SMALL STAKE OR A
VERY LARGE ONE. LUCY DENYER
REPORTS ON THE LATEST NEWS
ENTREPRENEUR Vincent Tchenguiz (pictured) –
already one of Mayfair’s richest men – is
bidding to become one of Britain’s largest
residential landlords with a £500m venture to
take advantage of the exodus from the buy-tolet
sector.
The Iranian-born businessman, who started
by collecting empty Coke bottles to claim the
deposits, and started his property empire with
£50,000 from his father, has agreed a deal with
the Royal Bank of Scotland to create a fund –
seeded with an initial £100m in cash and debt –
that will grow to £500m over five years. This will
then be used to buy large numbers of homes to
let to people unable to get on to the property
ladder.
The company, to be called First UK
Residential, will buy off-plan homes and later
let them under its brand name. His decision to
SOUNDS LIKE a dream scenario, but the offshore company
London Central Portfolio Property Fund (LCPPF) is offering
experienced and professional investors the opportunity to
buy a share in its property portfolio for as little as that.
“It’s a unique way of accessing the central London
market,” explains Naomi Heaton, chief executive of LCPPF.
‘Recession proof’ residential
Investing in Mayfair for £50,000?
“And because you can add it to a private pension scheme,
there are tax benefits, too.”
Anyone dreaming of moving into a Mayfair pad for just
£50,000 will be disappointed, however. That figure buys you
a share in LCPPF’s portfolio of 15-20 one and two-bed West
End properties as a whole rather than a portion of a specific
property. And you won’t see an annual return either: because
the portfolio is geared, profit goes back into the company
rather than to the shareholders – you only get your money
back when you sell up at the end.
If you fancy taking a punt on the property market without
shelling out a fortune, however, it could be worth looking at.
After all, central London is booming: average values in central
London run in excess of £750,000, and according to the
latest figures from estate agent Knight Frank, prices of the
best properties in central London have risen by more than
33.3 per cent during the past year – the fastest rate of
growth for nearly 20 years.
“The fund aims to double an investor’s stake, with a
target of 10 per cent growth per year,” says Heaton, who
adds that the “Olympic effect” should see London house
prices soar in the run-up to 2012.
Which means you could see your investment grow as
quickly as a 100m sprinter runs – hopefully without collapsing
at the end.
Closing date for investors is July 20 2007.
www.londoncentralportfolio.com
The business
of property
form First UK Residential came as interest rates
rose yet again, to 5.5 per cent, and the Royal
Institute of Chartered Surveyors warned that
landlords are exiting the buy-to-let sector.
But in a recent interview with Bloomberg,
Mr Tchenguiz referred to the management of
property – particularly on a large scale – as
being a safe investment. “Our core residential
business is pretty much recession-proof,” he
said.
Mr Tchenguiz already owns around 200,000
properties and manages the freehold estate of
80,000 in the UK. It is thought that his eventual
plan is to float the vehicle off as a residential
Reit, a tax-efficient property investment vehicle.
Mr Tchenguiz has also recently announced
his decision to give his £1bn property empire to
the recently formed Vincent Tchenguiz
Foundation (VTF) on his death, which will make
it one of the largest charitable foundations in
the UK. The VTF distributes funds to a wide
variety of causes, primarily relating to the
environment and those focusing on improving
people’s quality of life. Mr Tchenguiz believes
that investing in green technologies will
eventually make him a billionaire.