Mill Residential REIT, the first of its kind to offer exposure to the mainstream buy-to-let market via shares in a company, is available to both private and professional investors – the first time crowdfunding has been used alongside IFA networks, traditional private placings and an institutional IPO roadshow.
SyndicateRoom, which is used by both angel investors and sophisticated private investors, has raised its £2.1m from only 49 investors, and disregarding the very substantial investment by the founders of over £1.5m, has still averaged over £15,000 per investor despite its minimum investment requirement of just £1,000. Having secured its initial funding target, the REIT has agreed to make a further £500k of equity available to SyndicateRoom members in a process known as overfunding.
Further investment is to come from IFAs, private placings and institutional investors keen to buy shares ahead of the company’s stock market launch, expected later this month, after which the shares will be available to trade.
David Toplas, chief executive of Mill Group Residential, said: “We have been very pleased with the level of interest in our buy-to let REIT – the first time that people have been offered an easy way to invest in this popular asset class via a share that will shortly be listed on a UK stock exchange.
“At last people can invest in a buy-to-let investment that is suitable to put into your SIPP or ISA – but people will have to be quick to get into the IPO as it will be closing soon as we want to complete the listing process by Christmas. There are more details available at www.millresidentialreit.co.uk.
“Most people appreciate that residential investments have performed well, but have heard horror stories about tenants not paying, or worse, not looking after the property, and are very pleased to hear of a hassle free buy-to-let alternative to invest in a spread portfolio run by professionals.”
Gonçalo de Vasconcelos, founder and CEO, SyndicateRoom, added: “This is the first time a traditional IPO has been combined with crowdfunding, demonstrating Mill Group’s progressive approach and just how sophisticated crowdfunding has become. We are delighted to be trailblazing by bringing this new class of property investment to market.
“Mill Group has been successfully investing in and developing the UK’s property market for more than 20 years, and its exceptional pedigree underpins the launch of this pioneering REIT.
“Mill Residential REIT offers both large and small investors a more liquid way to hold a diverse range of buy-to-let properties in their portfolio, but at a fraction of the cost of owning a property outright.”
The company already holds a portfolio of residential properties across the UK, and as a REIT it will pay no tax on either its income or capital gains.
This REIT has been designed to offer investors a liquid and tax-efficient way to gain broad exposure to the buy-to-let market, in a company managed by professionals, and without the cost, risk or hassle of owning property directly.
To qualify as a REIT, the company will distribute at least 90% of its profits to its shareholders each year. Dividends will be paid tax free to investors who hold their REIT shares in an ISA or Self-invested Personal Pension (SIPP), and as a REIT is tax free on its rental profits and capital gains, this is proving a most attractive and tax efficient way to invest.