Property investment
Characteristics of Commercial Property Investment Vehicles
Limited Partnerships
These are usually unregulated collective investments. Investors participate as partners having a pro rata ownership of the underlying property assets on a tax transparent basis. In some cases, significant tax benefits can feed through from both capital allowances and potential schedule A losses, reducing the effective net cost of equity participation.
Investments will normally be for an anticipated 5-7 year period. In some cases income is distributed and in others, particularly where the deals are highly geared, income may be used to amortise debt. Gearing is usually on a limited recourse basis, secured on the property and income deriving therefrom and as such only investor’s equity is at risk.
Companies or individuals can invest with minimum participation, typically £50,000.
Liquidity of holdings is highly restricted, at best being on a matched bargain basis and stamp duty may also apply on transfers or sales.