- What is evolve All Saints Property LP?
- How do I invest?
- What type of commercial properties will be bought by All Saints?
- Is All Saints listed?
- So how long is my money tied into All Saints for?
- What happens if an investor is desperate to sell his/her units?
- What type of debt is utilised?
- Who will manage the portfolio?
- What are the forecasted Investment Returns?
- What is the tax position?
What is evolve All Saints Property LP?
It is the name of the Fund comprising the Partnership (evolve All Saints Partnership Ltd into which non tax-exempt investors can invest), and the Exempt Property Unit Trust (evolve All Saints Exempt Property Unit Trust suitable for tax-exempt investors such as SIPPs).
All Saints marks a return to the commercial property market for evolve after over 4.5 years. It ‘called the market’ back in early 2005. Back to Top
How do I invest?
You may be interested in the first instance to read the Presentation Document. You must read the Information Memorandum in full.
You then need to submit the relevant Application Forms to the Fund Operator.
(Please note: In the Application Forms there is an Anti Money Laundering Form. All investors need to have this form filled in by their FSA authorised financial adviser. Alternatively you may obtain a Customer Agreement and Suitability Form from the Fund Operator ).Back to Top
What type of commercial properties will be bought by All Saints?
According to the Investment Strategy, the Fund will source and acquire a balanced portfolio of ‘prime’ property. It is intended that the properties in the portfolio will comprise a mix of long leases (i.e. c20 years or more), some with RPI uplifts at rent reviews, that will yield on average 6.0-7.5% plus a number of smaller properties with short leases that offer asset management opportunities. The latter can be expected to be prime located, roadside, multi-let estates with trade or industrial uses yielding 7.5-9%. These estates may have shorter leases that can be re-negotiated to create long leases.
All Saints will also seek to spread risk between locations throughout the UK and between the main property sectors, whilst considering mixed use schemes, supermarkets, student and health care accommodation and other niche sub-sectors, JVs, mezzanine and indirect investments.
In short, All Saints will have a wide brief for stock selection but a clear mandate to provide Investors with distributions and capital growth.
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Is All Saints listed?
No. Direct property investment is less liquid than other investment categories. Liquidity in property investment, whether by listed stocks or quoted unit trusts, introduces volatility - as was witnessed during the credit crunch with the ‘run’ on institutional and open-ended property funds. Yet one of property’s key attractions is its relative lack of volatility, provided by a rental income stream supported by upwards only rent reviews. So to evolve, insisting that a property investment should be in a listed security demonstrates a failure to understand the characteristics of real estate investing.
In addition, purchase costs such as stamp duty can be high and thus it is rarely worthwhile viewing the investment with a short-term time frame as the returns over a short period are rarely attractive without taking unnecessary risks. Investors that seek to sell their units or shares by private treaty are unlikely to gain satisfactory results unless they look to retain their investment for the full business plan period.
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So how long is my money tied into All Saints for?
All Saints has evolve’s ‘unique’ exit strategy with the option to exit from around the end of year 5 of the fund. The unique exit strategy can be summarised as follows:
1. Investors will be asked around the end of year 5 if they are 100% sure they will want to exit after 7 years. If they confirm this intention they may be able to receive early redemptions during years 6-7;
2. Investors will then be asked around the end of year 6 as to whether they would like the Investment Period to be extended beyond the end of year 7. If there is sufficient demand then the Operator and Fund Manager will endeavour to extend the Fund for these Investors and any new Investors for a period of 5 years, or whatever period is agreed at the time.
Accordingly, it is hoped this exit strategy will afford the Fund Manager the opportunity to manage the Properties in accordance with Investors preferences (i.e. rather than there being a single Fund termination date based on a 'majority' vote that may not be a good time to dispose of the Property for market or banking reasons, nor suit everyone’s investment plans).
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What happens if an Investor is desperate to sell his/her units?
Although there is no established market for interests in LPs like All Saints, any investor that seeks to sell an interest prior to the investment's maturity will be able to contact evolve or the Fund Operator. The interest will initially be offered at market value to other investors in the fund, and afterwards to outside investors. A sale cannot be guaranteed but the quality of the investment may mitigate liquidity concerns.
In the event of death or divorce the Fund Operator will seek to establish a market, or failing that the Fund may acquire the Units at a small discount.
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What type of debt is utilised?
Any debt which is used will be non-recourse debt (i.e. the Bank has recourse only to the assets of the Partnership and not to the assets of the Investors outside of the Partnership). Any debt which is used will be limited to 50% of the value of the Fund’s portfolio.
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Who will manage the portfolio?
- Property Management – evolve property manages its portfolio in-house. Since this commenced in mid 2007 not £1 of rent, service charge or insurance is unpaid;
- Asset Management – this is also managed in-house, helping to ensure maximum value addition to the portfolio. Examples may include:
- Planning and development
- Managing letting campaigns
- Negotiations with existing tenants
- Bank financing
Specialist third parties to be employed will include rent review surveyors, letting agents and capital allowance consultants.Back to Top
What are the forecasted Investment Returns?
| Year 1: | 0-7.0% (will depend upon speed of investment and acquisitions). |
| Years 2-6: | 5-7.0% p.a. |
| Year 7: | All equity to be returned at end of Fund, unless extended. |
| Investor Priority Return: | 10% p.a. |
| Anticipated Investor Return: | 12% p.a. IRR (after all anticipated costs and commissions). |
What is the tax position?
All Saints will be tax transparent so Investors are taxed at their marginal rate. The income and CGT positions can be summarised as follows:
Tax Position – Income Tax
SIPPs and SSAS – no tax.
Individual investing directly –Any income will be taxed at their marginal rate.
Tax Position – Capital Gains Tax
SIPPs and SSAS – No tax.
Individuals investing directly – 18% CGT on disposal of Units (after utilisation of annual allowance). CGT will also be payable in the event of a property disposal at a fractional share of gain. In such an event it is expected the Distribution will at least cover the CGT liability.Back to Top