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Sandstone launches new REIT fund fuelled by property market growth

Sandstone has achieved returns of 28% per annum, over the past 25 years

Sandstone, a UK-based private property investment company has launched the Sandstone Residential REIT, focused on traditional residential property across ten cities in the UK.

The trust will allow a host of entities, including family offices, fund managers and private clients with SIPPS to invest in the UK residential market in a ‘tax efficient way’.

Projected returns are expected to be in the region of 17%, as there is a maximum gearing of 50%.

The UK’s property market continues to offer highly attractive investment opportunities, growing at its fastest rate since 2007 in March.

Sandstone was founded in 1997 with the purpose of helping clients to build portfolios of residential properties, which are then rented to university students.

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“The Sandstone REIT is a logical next step, for clients – existing and new,” the company said.

Performance

Sandstone produced a White Paper on its history and market segment, which demonstrates high and steady returns, driven by rising demand and constrained city centre or prime location supply. 

The company has achieved returns of 28% per annum, over the past 25 years, based on 75% loan-to-value gearing.

The resilience of the student accommodation market and Sandstone’s experience during the pandemic bears this out: occupancy in the portfolio has been above 95%, and rental income rose by 12% in 2020.

In addition to its core services of property sourcing, renovation, furnishing and ongoing rental and management, clients also benefit from annual reviews, green upgrades, and bespoke reporting.   

The Sandstone Residential REIT will allow clients, old and new, to invest into a listed fund, “benefiting from the advantages of a booming rental market, capital gains, corporation tax efficiency as well as diversification of investment and liquidity”, the company said. Existing clients will also be able to move their properties into the REIT.

Peter Grant, founder and CEO of Sandstone Group said:

“Sandstone’s new REIT allows a whole new group of clients including Family Offices, Institutions and Charities to capitalise on high performing investments in the UK residential property market, in a hands-off way. It gives them the opportunity to move assets into a listed fund and benefit from the associated gains.”

“We are already seeing interest from client groups in the UK and Europe, as well as Singapore, Hong Kong and across Asia.”

“Private clients often have strong connections with the UK, whether it’s because of them, their children or grandchildren being educated here. The UK residential market has an incredible track record, combining low risk and high returns.”

“There are very few residential REITS in the UK, and our new Sandstone Residential REIT has been created with large institutional investors in mind.”

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