Property Investment

What is a property syndicate?

Pi syndicates enables investors to benefit from collective purchasing power, accessing property that may not otherwise be afforded, and in property that is often not on the open market. Investors will receive an assured fixed-term rental income and potential capital gain.

How it Works

Why Invest in a PI Syndicate?

Direct investment, ownership & control

Pi provides investors with the ability to select a specific property investment opportunity in which they wish to invest; hold a defined share of that property pro rata to their equity invested; play an active role in all key investment decisions, whilst outsourcing routine administration to a highly experienced team of property professionals.

As a syndicate member you have direct proportional ownership of the assets held within your nominated syndicate. Importantly, you have direct control over the management and investment decisions to help maximise your returns. Whilst each syndicate has its own unique investment profile, principally the syndicated property will secure a fixed tenancy rental contract with a Housing Association for their requirement to provide affordable homes. The demand for such property is exceptionally high and is forecast to grow significantly.

Email us
+44 (0) 207 118 56 56
BOOK A VIDEO MEETING

Pi Case Study

Investment Brief:

A residential block consisting of 13-two bedroom flats; internal garage; retail unit situated in Stratford, East London. It achieved the client’s investment criteria of an attractive rental income and potential for capital uplift.

Investment Returned:

  • 6.5% net rental yield p.a with no void periods.
  • 36.5% IRR over 2-years.

How to invest tutorial: 7-step process

1
Select syndicate & review Offer Document
2
Make investment pledge
3
Online verification checks made
4
Transfer pledge monies to lawyer escrow account
5
Receive your Trust Deed confirming your proportional ownership
6
Vote online regarding management decisions
7
Receive investment returns

Watch the 7-Step How to Guide

After you have committed to a specific investment amount in the nominated syndicate, you will be provided with the bank account details for lawyers ( Druces) who will act for the syndicate. Druces will hold your monies in their escrow bank account until the syndicate is fully subscribed. Upon membership of the syndicate you will be required to vote on important management issues.

Download PDF Guide here

2006

Pi investment experience

The Directors of Pi each have a minimum of 18-years experience in the UK residential and commercial property market, with direct responsibility for sales, lettings and property management and development. Over this period they have acted on transactions in excess of £240million, and managed a portfolio of 2,400 residential properties. Their clients spans asset managers, property developers, private individuals and overseas investors.

Delivering Value

Target Return: Assured income and capital gain

Assured Income:
The investment strategy, period and target returns for each syndicate are detailed in each corresponding investment memorandum. Our aim is to achieve an income return in a range of 4% – 6%  per year.  Tenancy contracts will be for a fixed period with Housing Associations. Regular rental distributions are normally made on a quarterly basis.

Added capital gain:
Capital gain of approximately circa 3% – 5% per year over the syndicate’s investment period is envisaged. Whilst returns can be enhanced using leverage, the initial property purchase will be done using cash to enable speed of purchase. This greatly assists the possibility of purchasing property at below the value from vendors who are prepared to accept a lower price in exchange for a quick sale from a serious buyer. The current economic environment has enhanced buying opportunities from vendors, some of which are financially distressed. Buying at below the normal market value assists in adding to capital gains over and above those associated with medium to long term property investment.

Investment term:
The investment terms are typically a minimum of 5-years. A syndicate member can exit their investment prior to the end of the term with the option to sell their equity stake to another party should they wish. Details of which can be provided upon request.

Legal structure, syndicate set-up and conveyancing

The simplest and most efficient method of co-participation is through a Syndicate – utilising a nominee company and a Trust structure, which is both tax transparent and tax efficient, and suitable for a variety of investors.

As the syndicate manager, Pi will prepare financial analysis to determine projected investor return and confirm suitability for syndication of a given property. Once confirmed suitable for syndication, Pi will prepare a prospectus for investor circulation, consideration and expression of interest.

Druces LLP will provide the legal expertise in handling the acquisition and sale of the property, and undertake all aspects of the legal work in setting up the syndicates and the buying and selling of properties within the syndicates. For each syndicate a new nominee company will enter into a Declaration of Trust to declare that it holds the property as legal owner on trust for the syndicate of participating investors, each of whom will own a defined share of the property (Equitable Title). The nominee company will be a UK based special purpose vehicle (“SPV”) and after the sale of the property within a syndicate the company will be closed to ensure that no residual liabilities arise thereafter.

The SPV itself will have no value – it will be purely a nominee company and will be non-trading. It will have an issued share capital of £1. No shares in the SPV will be allocated to investors at any time and the SPV will file dormant company accounts each year.

About Druces Ltd

Druces pioneered investment in property by syndication for private investors more than 20 years ago, enabling individuals to join syndicates for the purpose of investing in UK property as part of a group. To date they have concluded in excess of 300 private property syndicates.
www.druces.co.uk

Direct control of your asset and e-voting:

The direct and active control of the syndicated property ensures that it does not constitute a collective investment scheme and therefore is not subject to the Financial Conduct Authority (FCA).

In order to ensure a syndicate passes the ‘control test’ syndicate members are required to be involved to make decisions on how the syndicate deals with certain management issues. The Syndicate Manager (Pi) will appoint professional advisers and property managers to deal with day to day running of many aspects the property e.g. collecting rent, lease queries, maintenance, services e.t.c., but you will still be involved periodically and need to make yourself available for key decisions. Decisions making and voting on key issues will be facilitated by our tailored voting platform which enables syndicate members quick and efficient management to have a direct say on the important management issues on their direct property investment.

The voting platform is independently run by Mi-Voice with a host of features including secure encryption log-in, unique member voting codes, voting confirmation, anonymous voting, real time reporting.

About Mi-Voice

Mi-Voice was established in 2006 by iMeta Technologies; an organisation with a pedigree of developing secure transactional applications for clients such as Virgin Money and top tier investment banks and broker/dealers. It evolved to develop specialist secure online voting and management platforms and is one of the UK’s leading providers of electoral service. It conducts elections in over 20 countries, are a UK-Government approved scrutineer for Trade Union ballots, hold organisations such as the Police Federation of England and Wales, The Welsh Assembly, Scottish National Party and The Foreign and Commonwealth Office as clients.
www.mi-voice.co.uk

Mi-voice clients

Individual liquidity/Exit of investment:

A syndicate member may sell, or transfer, their holdings to whoever they wish, as long as the acquiring party qualifies as being a suitable ‘Exempt Person’. A sale, or transfer, of a holding can take place at any time during the Syndicate Member’s ownership and does not require the sale of the whole property at that time.

A valuation will need to be agreed but otherwise the transfer of the property share is usually completed within two or three weeks – thus giving far greater liquidity than is available within the direct property investment market.

As syndicate manager, Pi is authorised to co-ordinate and assist in the sale of a syndicate holding by promoting it to its approved client base. An administration fee of c.£550 plus VAT (including all legal documentation) is payable for this service.

Other than between other syndicate members and Pi’s client base, there is no established secondary market for the sale of a bolding in a property purchased under these arrangements and there can be no guarantee that a holding will sell. As with any property, values can vary at any given time and will depend on factors such as; economic conditions, tenant covenant strength and length of  tenancy lease remaining.

Taxation

The syndicate is structured as a ‘bare trust’, with the newly formed SPV company holding the property on behalf of the syndicate of investors. This is a transparent structure, and all income or gains derived from the syndicate are taxable on the investors directly, with no withholding tax arrangements being required or made by the ’trust’ and all distributions being received gross.

On this basis, non-taxpaying entities investing in a syndicate will face no tax liabilities, and all other investors will be liable at their own effective marginal rates. Please note that SIPP or other forms of pension investment can invest in commercial property, but not residential property.

Private investors may opt to make their share in the syndicate jointly owned with their spouse, enabling the utilisation of two Capital Gains Tax annual exemptions (assuming available) to mitigate liabilities on exit from the syndicate. In addition, this arrangement would also potentially give access to lower tax rates on income during the course of the investment period depending on their personal circumstances.

All investors should seek independent tax advice before making any investment in a syndicate, and overseas or offshore investors should consider how best to structure their investment.

Pi does not offer tax advice, and nothing within this or any other section of this website should be considered as such.

FAQ

Investment

Capital Growth

Individual liquidity/Exit of investment:

Security

Management & Control

Legal/Conveyancing:

Regulation

Fees

Taxation

Don't miss out!

Access the latest property opportunities, advice and off-market investment opportunities before others.
I agree and have read the Property Investment Terms and Conditions *