A residential fund launched by developer Urban Splash has had a successful second year of trading with investor returns of 12 per cent.
A soft launch for the fund, which sits independent from the Manchester-headquartered Urban Splash group, closed in February 2019 and was oversubscribed.
It saw an initial £20m of seed funding secured from investors across the UK.
In the past year, the portfolio has grown significantly, acquiring 50 homes and taking the total of the company’s diversified regional private rented sector portfolio to 123 properties located across Manchester, Sheffield and Bradford.
The acquisition strategy is focused on, but not limited to, Urban Splash properties.
In its second year of trading, the fund has reported annual investor returns of 12 per cent, reflecting a 3 per cent paid dividend and 9 per cent capital gain, as well as 94 per cent average occupancy across the nationwide portfolio.
Profit for the financial year for Urban Splash UK Residential stood at £844,000, down from £1.04m in 2018, including a revaluation gain of £569,000 (2018: £770,000).
The net asset value is £16.3m (2018: £6.9m), reflecting tangible assets of £13.5m (2018: £6.3m) and net current assets of £2.8m including a cash balance of £2.82m.
The fund reported no debt.
Akeel Malik, the former UBS analyst who leads the business, said: “We are delighted to report these results, which show our successful performance to date as well as a pleasing uplift in values across the portfolio.
“It’s wonderful to have been given the opportunity to grow a fund like this within the Urban Splash family of businesses and we look forward to further fundraising next year; given the unrivalled experience and connections of Urban Splash in the UK regions, I would hope that we continue to outperform the market.
“The fund aims to distribute dividends of 3 per cent per annum and pursue capital and rental growth. A second fundraise is anticipated to launch in the New Year.”
He added: “I believe if the housing market continues to grow as expected our returns should grow and, given the unrivalled experience and connections of Urban Splash in the UK regions, I would hope we continue to outperform the market.
“We are however in uncertain times, and if the housing market falls, we will be not be immune from valuation drops. That said, I believe in this scenario that our rental income stream will remain resilient and many new opportunities will also arise for us to take advantage of market distress.”
