Scottish millionaire launches commercial property fund
A Scottish entrepreneur is launching a £30m commercial property fund, as experts predict the UK commercial property market will recover later this year.
Property entrepreneur Brian Gillies’ Alchemist Commercial Property Fund is seeking to raise a total of £30m split between debt and equity investment to fund the project.
“Falling property prices mean that the income returns that can be achieved from well-let properties have already increased to levels not seen since the early 1990s,” said Gillies.
“When this is combined with unprecedented low interest rates, the difference between rental income received and interest payments made on borrowings will mean that the next two years should offer the best opportunities to build an income-producing property portfolio since the Second World War.”
Gillies plans to acquire a series of commercial properties let to dependable tenants in prime locations. He is now actively seeking investors to join the fund, which has a minimum investment of £50,000. Each investor would be expected to provide a 5% commitment immediately.
Alchemist is initially concentrating on mostly prime properties where hard-pressed investment funds and crisis-hit banks are keen to offload property.
The news follows a recent report from property fund manager Cordea Savills, which also predicted that the UK commercial property market will begin to recover later this year which should create a compelling investment opportunity.
The report predicts that by the end of 2009 UK capital values will have fallen around 50% from their 2007 peak, and this short-term distress is creating a “window of opportunity” for investors to purchase high-quality commercial property, with secure income, at attractive prices.
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