Syndicate model proves popular

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A property syndication business launched 18 months ago by Harrogate entreprenuer Jan Fletcher OBE is gaining in popularity as pension funds and rich individuals increasingly consider investments outside London.

Harrogate-based Rougemont Estates recently bought English Heritage’s Grade II listed offices in York for £2.6million on behalf of a syndicate of private investors, bringing the total value of the company’s property acquisitions since 2010 to £26 m.

Now it has launched its latest syndicated commercial property investment: the acquisition of the northern region headquarters of a major financial institution, believed to be a Halifax Bank of Scotland office in Sheffield.

Ms Fletcher, chairman of Rougemont Estates, said the syndicate model, which gathers sums of more than £25,000 and collectively invests them in commercial properties, is proving popular as bank and stock market investments deliver low or volatile returns.

“Even in a recession, there are still opportunities in commercial property,” she said.

“Qualifying investors looking for long term secure income to support pensions or lifestyles can typically expect to get between six and seven per cent return, compared with around three per cent from traditional investments.”

Rougemont Estates was established in the wake of the Lehmann Brothers crash and subsequent global financial crisis.

Ms Fletcher continued: “As an FSA authorised and regulated company, we operate to exacting standards with regard to who we can promote our products to. Clients must therefore be certified high net worth individuals, sophisticated investors, or suitably incorporated pension funds and trusts.”

James Craven, Rougemont’s managing director, said: “Our investors like the fact all our acquisitions are made with cash funds and no borrowings are permitted to be secured against the properties, they are also encouraged by the fact that we often invest alongside them.”

He added: “We are always looking for the right properties in Yorkshire towns and cities. Critical factors for the right investment are the financial strength and quality of the tenant, a minimum unexpired lease of 10 years, the type of property, and rate of return.”

Approved syndicate members can purchase a direct interest in one or many commercial properties and will receive a proportionate share of the annual rental income distributed quarterly and all the potential for capital growth.