Rougemont Estates

Rougemont Estates completes acquisition of prestigious York Office building and launches new Sheffield Office syndicated opportunity.

Following the purchase of English Heritage's Grade II listed offices in York for £2.6m on behalf of a syndicate of private investors, Rougemont Estates has now launched its latest syndicated commercial property investment – the purchase of the northern region headquarters of a major financial institution, based in Sheffield.

Rougemont Estates was set up by Jan Fletcher OBE and James Craven MRICS 18 months ago, in the wake of the Lehman Brothers crash and subsequent global financial crisis.

Jan Fletcher commented;

"Our clients are high net worth individuals, sophisticated investors; private pension funds and family trusts, all of whom are looking for long term secure income with attractive rates of return, and with potential medium to long term capital growth. Well researched, appropriately tenanted commercial property is able to provide this"

"The critical factors are the financial strength and viability of the tenant, a minimum unexpired lease to the tenant of 10 years plus, the property itself, and the rate of return. We are continually assessing such opportunities and in a variety of city locations (insert region depending on paper).

"Fifty per cent of our clients acquire their syndicate holdings through private pension funds, resulting in rental income and any future capital gains being retained tax free within their fund. We are also attracting an increasing number of cash investors, family trusts and, interestingly, farmers, who are seeking to diversify away from agriculture and rural land holdings.

James Craven added;

"Typical annual returns to syndicate members are between six and seven per cent per annum, distributed quarterly in advance, in direct proportion to each member's holding in the property. Importantly, and unlike commercial property investment funds, each syndicate member owns a pro rata percentage of actual property itself "Our clients like the fact that we are one of the few FSA regulated companies operating in the syndicated commercial property investment sector. We do not permit any borrowings, or charges, to be made on the properties that we syndicate. All acquisitions are therefore made solely with cash funds. Accordingly, there is no third party financial institution involvement. Clients also like the fact that we often invest alongside them retaining our own stake in the property"

"As an FSA authorised and regulated company, we operate to exacting standards with regard to who we can promote our products to. Clients must be certified high net worth individuals, sophisticated investors. Alternatively, they can be referred to us by their own FSA Regulated Independent Financial Advisor"

"Our latest syndicated opportunity is a property we are delighted to have secured and having only been promoted for two weeks is already 65% subscribed"

York-based Ebor Trustees Limited, a professional trustee and scheme administrator and part of the Walker Crips Group plc, is one of a number of pensions advisors that works closely with Rougemont.

Executive director David Hetherton believes that changes to pension rules may make syndicated commercial property investment increasingly more attractive to investors:

"The pension law changes mean that people will no longer have to buy an annuity before the age of 75. So there will be no need to realise specific investments, including syndicated commercial property, in order to purchase an annuity.

"In our view, this makes syndicated commercial property an attractive investment as the trend continues for a move into self investment and longer term investment strategies. For people looking for an income from their fund, there may be a potentially higher return than with a Lifetime Annuity, with the likely added bonus of an increasing income and potential capital growth. Many SIPP and SSAS clients have a real appetite for the kind of property investment Rougemont Estates is offering."

Approved clients can purchase a direct interest in one, or a range, of commercial properties and will receive their pro rata share of the rental income, quarterly in advance. The minimum syndicate member investment is £25,000, with no upper limit.

Property syndicate model defying recession

Yorkshire Post - London Business Desk
Published on Tuesday 29 May 2012 07:57

ENTREPRENEUR Jan Fletcher said her property syndication business is gaining traction as pension funds and rich individuals increasingly consider investments outside London's overheating market.

The businesswoman, who is currently embroiled in a High Court battle with Leeds City Council over the Leeds Arena development, revealed her Rougemont Estates business has completed its first property syndication and is rapidly gaining interest in its second.

The Harrogate-based firm recently bought English Heritage's Grade II listed offices in York for £2.6m, bringing Rougemont's total investments to £26m.

Ms Fletcher said the syndicate model, which gathers sums of more than £25,000 and collectively invests them in commercial properties, is proving popular as bank and stock market investments deliver low or volatile returns.

"Even in a recession there are still opportunities in commercial property," said Ms Fletcher, chairman of Rougemont Estates. "Investors looking for long-term secure income to support pensions or lifestyles can typically expect to get between six and seven per cent return compared with around three per cent from savings placed elsewhere.

"There are huge opportunities to look outside the London market to the provincial centres. Things are priced much lower so there's the advantage of a much higher capital gain if you look beyond London."

Ms Fletcher founded Rougemont in September 2009 with property investor and chartered surveyor James Craven. It initially focused on individual investments while seeking full approval from the Financial Services Authority, and began syndicating in April 2011.

Roughly half of Rougemont's client base comprises pension funds, with the rest wealthy individuals and family trusts, said Ms Fletcher.

Rougemont's second syndicated investment is believed to be a Halifax Bank of Scotland office in Sheffield. This investment is currently almost 60 per cent reserved, said Ms Fletcher.

Rougemont claims three to four per cent of an investment as its fee, and property titles are held with private bank SG Hambros. Investors receive yields of six or seven per cent.

Ms Fletcher said the firm seeks investments in university cities with stable, long-term tenants, typically on 10-year leases.

"A lot of our investors are risk-averse," she said. "We are not buying anything with under 10-year leases. It has to be a medium to long-term view."

The FSA's oversight means Rougemont must provide the regulator with quarterly updates. However, the watchdog does not compensate investors in the event of a possible collapse.

Mr Craven, Rougemont's managing director, said it has not had any defaults despite the tough economic climate. He expects property prices to increase over the next decade.

"We're going to be in the real grind for the next few years but over the medium to long-term I think they have to go up.

"We are trying to buy quality assets in quality city locations. It's not a get-rich-quick scheme."

Rougemont is also exploring syndicated development opportunities, where schemes are being held back by lack of bank funding. But he said finding stable building firms is proving the main hurdle.

Many property investments struggled during the downturn, as asset prices plunged and defaults climbed.

However, Stuart Law, chief executive of property investment adviser Assetz, said the sector is becoming increasingly attractive as values are often about 50 per cent below their peak.

"There's a lot more value in this sector today than there was in 2009 and in the same way the risk has reduced," he said.

ROUGEMONT TAPS INTO INVESTMENT OPPORTUNITY

Rougemont has completed the purchase of a 40,000 sq.ft. call centre from The Kelda Group (Yorkshire Water) on behalf of a private family trust. Loop Customer Management signed a new 15-year full repairing and insuring lease with the rent increasing every year by 2.5% per annum. A Kelda Group company has guaranteed the lease and the purchase represented a 7.5% net return to the trust.

James Craven, Managing Director of Rougemont commented: “In testing market conditions Rougemont was pleased to be able to facilitate a quality long term investment with the benefit of future rental growth. This acquisition optimises everything we are seeking to deliver to our client base”.

ROUGEMONT BRINGS REGULATED COMMERCIAL PROPERTY SYNDICATION

International businesswoman Jan Fletcher OBE and leading property syndication specialist James Craven have launched a new property investment company.

Based in Harrogate, Rougemont Estates brings together groups of High Net Worth individuals, corporate entities and pension funds to invest their collective capital in commercial property investments, with no bank borrowing. The company is the only property syndication company outside of London authorised by the Financial Services Authority (FSA) to promote and operate syndicated commercial property as an unregulated collective investment scheme.

Chairman of Rougemont Estates, Jan Fletcher commented: "Rougemont aims to take advantage of a depressed UK commercial property market by purchasing investment property and syndicating the ownership to our client base. This puts us in a strong buying position and gives our investors greater diversity and long term security with no debt."

Rougemont will also provide the necessary FSA regulatory environment and operational expertise for collective groups wanting to purchase commercial property, as well as the outright purchase of investment properties on behalf of clients.

Managing director James Craven has a strong track record in property syndication having acquired £32m worth of commercial property within the North of England in the last eighteen-months for cash syndicates of private investors and family trusts. During the last ten years, he has successfully acquired and managed over 35 syndicated acquisitions, with a combined value in excess of £100m.

Mr. Craven commented: "There has been considerable interest in commercial property syndication in the last 18 months with investors looking for long term secure income to support pensions or lifestyles.

"We give clients the opportunity to purchase a direct interest in one or many commercial properties therefore diversifying their interest amongst a number of property sectors and locations."

Rougemont Estates typically acquires office, retail or factory premises let to large institutional tenants with good covenant strength on a long-term lease. Syndicate members are entitled to the rental income from the property together with any capital appreciation.

Jan Fletcher is one of the UK's leading entrepreneurs with major interests in property investment and development, natural health products, motor retailing, pharmaceutical and restaurants. She was named Veuve Clicquot UK Business Woman of the Year in 1994, Yorkshire Woman of the Year in 1995 and in 1997 was awarded an OBE for services to industry.