We understand that liquidity of UCIS products is a concern to both investors and investment professionals and that direct property ownership can carry some additional liquidity risk. We stress that direct property performs best when held over the long term, however we manage the portfolio of properties to allow investors a genuinely liquid asset, exiting on a matched bargain basis.
The Custodian Capital model offers holdings in open ended limited partnerships which allow investors to manage their own exit. All properties are independently valued every six months giving investors a current and fair market price, from which we derive the net asset value. We facilitate a secondary market in partnership holdings, which trade at net asset value. With the demand for secure, high yielding investment strong we are currently experiencing a very good second hand market in partnership holdings. Investors with individual holdings of say, £10,000-20,000 can typically find a buyer in one to six months, although this is not guaranteed.
We recommend that investors make small denomination investments of £10,000-£50,000 as part of a portfolio of five or more partnership holdings to ensure diversification. Small denomination investments also aid liquidity.
New clients of Custodian Capital increase demand for the secondary holdings as they build up their diversified portfolios. Secondary holdings typically offer good value as they fall below the £120,000 stamp duty land tax threshold and do not incur agency of legal fees. An administrative charge of 3% of the value of the holding is charged by Custodian Capital at sale and purchase.
Typically over a 12 month period we registered less than £1m of secondary holdings to be sold (0.75% of our total property under management). On average secondary holding sales complete within three months with none taking longer than nine months.
Custodian Capital has over 1200 separate investors and this number is increasing all the time. While we understand the importance of liquidity, direct property investment should be seen as a long term asset held for income and the prospect of future capital growth.
09 Dec 2021
30 Nov 2021
04 Nov 2021
02 Nov 2021
25 Oct 2021