Charities property fund hits £1bn

The Charities Property Fund (“The Fund”), managed by Savills Investment Management, has passed the £1 billion milestone, strengthening its position as the largest charity-specific property fund in the UK.  In the past 12 months the Fund has grown by £220 million and acquired 40 properties at an average yield of 6.7%. 

Key to the Fund’s rapid growth has been its ability to generate a consistently high level of income while continuing to outperform the IPD/AREF All Balanced Property Funds Index. On average the Fund has delivered 5.6% net income over the past five years and in the last 12 months alone it has distributed £45 million of income. It has now outperformed the Index for eight years in a row. 

Since 2013 the Fund has added over £500 million of equity and is now the ninth largest UK Charity by assets.  The Fund’s 1,795 investors include 32 Oxbridge colleges, 18 Universities, 21 hospices, 23 Parish Churches, nine Cathedrals and seven charities for the blind.

Over the past six years the Fund has acquired over 100 separate properties, investing over £700 million in assets that are now valued approximately £850 million.  It has a well-diversified portfolio of 113 properties with a vacancy rate of 0.9% (compared to the IPD average of 9.9%). 

Harry de Ferry Foster, Fund Director, commented:

“We are thrilled to have crossed the £1 billion milestone only two years after having reached £500 million.  What has been particularly positive is that we have demonstrated the scalability of our investment process by continuing to outperform the benchmark while doubling the size of the fund.  We look forward to welcoming new investors to the Fund over the coming years. “Core to our success is our ability to acquire high quality assets ‘off market’ at attractive prices, which are typically let to very good covenants on long leases.  We continue to look for interesting growth opportunities, with a bias towards fringe London locations, good quality retail warehousing, alternatives and the industrial and distribution markets.  These sectors benefit from a strong supply/demand imbalance and a higher yield.”