ROMANIAN DYNAMIC PROPERTY FUND
The Fund enables investors to participate in the rapid growth of one of Europe’s fastest growing member states. It benefits from being at the front of the trend and not at the end of the property boom.
Latest News
- Unit Price £113.89
- Partnership Price £114.42
- Performance since inception – Partnership 14.42%, Unit 13.89%
The following article from globally renowned fund manager Dr Mark Mobius of Franklin Templeton Investments may be of interest: http://mobius.blog.franklintempleton.com/2010/04/21/demystifying-romania/#more-604
Projected Fund Returns and Overview at inception
Net projected Internal Rate of Return of 18.3% per annum.
£100,000 invested in the Fund is projected to return over £236,000 over a five year period.
Target Properties
Apartments or family homes in or around city centre or with good transport links.
New-build, high quality specification to cater for the growing and aspiring middle class.
Over the last 4 years €12 billion has been remitted by Romanians working
overseas. It is believed a significant proportion of this is to purchase land and
property.
Target Cities
Capital city, Bucharest and the major secondary cities such as Brasov, Cluj, Iasi, Constanta and Timisoara. The largest 6 cities account for 17% of the population (National Institute of Statistics as at 1st Jan 2006)
Many of these cities are benefiting from huge levels of Foreign Direct Investment and a further EUR 5.7 Billion over the 2007-2009 period (UniCredit Group Market Report May 2007)
Falling unemployment: register at 5.9% in 2005 (Guide to Doing Business and Investing in Romania 2007 Edition Pricewaterhouse Coopers)
Purchase Strategy
Primarily to focus on growth cities and specific growth areas within those cities.
Volume discounts to be obtained and independently verified against external valuations.
Joint venture development deals with reputable developers.
Land purchase in high demand areas, resale with planning and development.
Fund Structure
A tax transparent Limited Partnership structure for individual investors.
Exempt Property Unit Trust (EPUT) specifically created for tax-exempt UK investors such as SIPPs, SSASs and charities.
Investors in the EPUT can save up to 40% in tax relief for new contributions to a SIPP or SSAS.
Highly tax-efficient investment structure with limited tax leakage.
Fund Assumptions
Gross rental yield of 6.0%.
Property price growth geared up with mortgage loans of up to 65% loan-to-value, non-recourse to investors.
Management Team
Fund Manager
Catalyst GP 2 Ltd
An experienced team of investment professionals with many years of advice in client portfolio management, asset allocation and the marketing and structuring of syndicated property funds.
Property Manager
Anglo-Romanian Development (ARD)
Alex Pintea, the founder, is widely regarded as the Number 1 expert on Romanian property in the UK and is regularly interviewed for market comments and analysis.
ARD is the only property company recommended by the Romanian Embassy and has been involved in the Romanian property market since 1998.
Fund Promoter
Stratus Capital LLP
Stratus is a specialist team with many years of experience in the marketing and distribution of innovative financial products to the advisor community.
Fund Administrator
Stratus Capital
Stratus Capital LLP is one of the leading companies in the UK in establishing and operating collective investment schemes.
Romanian Economy and Residential Market
Potential Strong Economic Growth
Very strong GDP growth averaging 6.1% per annum for previous 5 years (The Economist)
EU Structural and Cohesion Fund: Euro 31 billion of infrastructure spending between 2008-2013 (UniCredit Group Market Report May 2007)
Residential property growth: We expect that apartment prices will continue to increase at a rate of 15% to 20% per year for the next 2 to 3 years” (Colliers Romania Report 2007)
Focus on disinflation and stable interest rates.
Euro adoption expected in 2014. (UniCredit Group Market Report May 2007)
PricewaterhouseCoopers forecast in 2006 that house prices in Romania are expected to quadruple (414%) within a decade.
Rapid Urbanisation
Housing supply shortage: demand for 1 million households.
In Bucharest alone, demand is approximately 300,000 units with a building capacity of circa 15,000 units per year.
Rising local affluence driving residential prices.
461% average income increase by 2014.
Gap between other EU states is narrowing.
Growing Mortgage Market
Outstanding mortgages 2.8% of GDP compared to 60% in Germany and 100% in the UK.
24% pa growth 2007-2009 (UniCredit Group Market Report May 2007)
A rapidly developing mortgage market with a more flexible range of products.
Should further increase demand for residential property ownership.
