Mill Group is currently developing an innovative UK residential investment fund called Investors in Housing, which will be managed through its residential property arm, Mill Residential Investment Management.
Investors in Housing Fund will use a new Co-investment asset model through which to acquire its investment in a portfolio of residential property interests which generate attractive levels of income on a very cost efficient basis. This new Co-investment model has considerable benefits over the traditional “buy-to-let” or AST models.
The key reasons for investing in the Investors in Housing Fund are:
- Recent monthly surveys show compelling trends in terms of improved expectations for prices and property demand.
- Investment projected to generate high unlevered returns with annual dividend yields.
- Investments to be made under Co-investment arrangements, which should provide significant upside to investors.
- Capital raise of £200m - £500m UK residential real estate fund, with a first committed cornerstone investor for up to £50m.
- Aim to invest fully within 12-18 months of first close, at a favourable point in the housing cycle.
- Mill Group will co-invest £1.0m.
Co-ownership benefits for Investors
- Much longer rental agreements than existing ASTs, without breaks
- Minimal voids and renewals and more certainty of the income stream.
- Contractual arrangements are fully tenant repairing and insuring.
- Lower management and administration costs than with ASTs.
- High level of income return compared to AST portfolios.
- The concept is scalable.
- Home ownership aspirations of the Co-investment provide an obvious additional exit strategy.
