Ground Rents Income Fund Plc (GRIF) is a closed ended company established to provide secure long-term performance through investment in long dated United
James Agar, the “Investment Director of Brooks Macdonald Funds, Alternative Investment Fund Manager to Ground Rents Income Fund”, said:
“We are committed to being a socially-responsible landlord, working hard to treat all leaseholders in a simple, honest and transparent manner.
““We welcome the Government’s consultation, which will lead to clarity on leasehold and ground rent structures.”
In the spirit of honesty and transparency, LKP would like to inquire about the other income streams of the fund from its residential freeholds: insurance commissions, consent fees, assignment fees, subletting fees, keeping a cat fees and so forth
Leasehold houses account for 11 per cent income of the £143 million fund’s portfolio.
Most of the portfolio (69.8% by income) is invested in ground rents which increase annually in line with indices, particularly the Retail Prices Index (RPI).
Of the remainder, 18% by value and 17% by ground rent income is attributed to doubling ground rents, of which 4% of the ground rent income is derived from three 10-year doubling assets.
“None of these three assets with 10-year doubling ground rents do so in perpetuity – they double a maximum of three times before reverting to having either no further review or an index-linked review cycle.
“The rest of the doubling assets in the portfolio are 25, 33, 35 and 50-year doubling assets, which equate to compound increases in rent of 2.8%, 2.1%, 2.0% and 1.4% per annum respectively.”
Ground Rents Income Fund plc total portfolio:
Type of rent review % of income
Fixed uplift 7.3
Flat (no review) 6.5
Doubling, 25 years 10.0
Doubling, 10 years 4.0
Doubling, 50 years 1.8
Doubling, 33 years 0.4
Doubling, 35 years 0.2
Of the total number of units in the portfolio, 15% are houses, which generate 11% of total ground rent income.
The average ground rent on the leasehold houses is approximately GBP110 per annum.
The ground rents on 66.7% by income of the leasehold houses adjust in line with indices, with only 2.7% containing doubling reviews on a 25-year review pattern. The balance of 30.6% is split between leaseholds with fixed adjustments (3.6%) and those which do not increase (27.0%).
Full statement here: http://otp.investis.com/clients/uk/ground_rent/rns/regulatory-story.aspx?cid=474&newsid=898006