A Fund managed by Swiss Life Asset Managers UK Limited
A Fund managed by Swiss Life Asset Managers UK Limited
The Property Income Trust for Charities (PITCH), managed by Mayfair Capital Investment Management Ltd (MCIM), has acquired the first properties in a move to invest in private residential, advised by the specialist residential investor, Hearthstone Investments.
PITCH’s strategy will focus on the acquisition of single-family private rental accommodation, primarily for lower income households, in response to a national shortage of quality, affordable accommodation where tenant welfare and high environmental standards will be prioritised.
The Fund aims to invest an initial £30m into a portfolio of c.120 homes with a focus on mainstream residential including new build, modern or recent conversions with an average property value of about £250,000. The strategy will increase PITCH’s exposure to alternatives into a sector that will provide diversification from traditional mainstream commercial property.
There will be a focus on properties offering two to four bedrooms, with a limited allocation to smaller unbroken freehold blocks of flats, typically up to 12 units. The strategy will be diversified across mainland UK suburban areas, including the outer London commuter belt and the big six regional cities, as well as other large urban areas.
The first acquisition comprises nine new build houses in Elmstead Market just to the east of Colchester, which are currently being developed by Hills Residential and due for completion in April 2022. The properties provide a mixture of two- and three-bedroom homes and will have strong sustainability credentials with each house heated by air source heat pumps.
The area to the immediate west of Elmstead Market will see significant infrastructure and housing growth over the next few years with the development of a 9,000-home garden town on the eastern outskirts of Colchester to include new and improved road connections. The development is expected to have a positive long-term impact on housing demand and valuation growth in the area.
In accordance with MCIM’s ESG policy, PITCH will seek to ensure its investments make a positive environmental and social impact by adhering to strict criteria at both the acquisition stage and during the ongoing asset management.
In the twelve months to 31 December 2021, PITCH has returned 22.9%, with an annualised return of 7.4%, 8.5% and 9.1% over three, five and ten years respectively. It is currently the second-best performing fund in the MSCI/AREF All Balanced Property Fund Index over ten years.
Hearthstone has been appointed as advisor to PITCH and will provide specialist investment resources to source and identify suitable stock, as well as taking responsibility for the day-to-day management of properties and the underlying tenancies. PITCH will retain full control over the ownership and liquidity management.
Simon Martindale, fund director of the Property Income Trust for Charities, comments: “The residential housing sector fits well with our thematic strategy and is expected to deliver stable and attractive returns over the long term. We expect the supply/demand fundamentals to remain positive, supported by a rising shift to private rental accommodation from a broad demographic base.
“Over the last twenty years, the UK residential sector has provided investors with an attractive risk-adjusted return relative to other asset classes. Coupled with inflation-hedged rents and low volatility, the sector has proven to be defensive while also offering attractive returns.”
Cedric Bucher, Chief Executive of Hearthstone Investments, comments: “Hearthstone are pleased to have been selected by Mayfair Capital as advisor to their UK Residential Property Strategy. Hearthstone launched its first UK Residential Property fund in 2012. Since then, the asset class has grown from a niche to a mainstream real estate sector in the UK. As with our existing strategies, we aim to carefully construct with the PITCH team a regionally diverse portfolio of energy efficient, high quality suburban homes affordable to a diverse range of tenants.”
Simon Martindale
Fund Director
Simon, who joined Mayfair Capital (now Swiss Life Asset Managers UK) in 2012, was Fund Manager of the Property Income Trust for Charities (PITCH) from 2015 and became Fund Director in 2021. He is responsible for formulating and implementing the fund investment strategy, investor reporting and portfolio analysis whilst also overseeing all acquisition, disposal and asset management activities.
Simon has over 15 years’ experience in commercial property and previously worked at DTZ and Edward Symmons.
Simon attended the University of Newcastle upon Tyne and completed a postgraduate degree at London South Bank University. Simon is FCA authorised and is a member of the RICS and the Investment Property Forum.
This press release was covered in the following publications:
React News: Mayfair Capital’s Pitch makes first foray into private rental housing - React News