News

Enterprise zone trusts pour £38m into Salford

News

Estates Gazette

17 November 1990

by Duncan Lamb

Tax shelter experts Laser Richmount and Property Enterprise Managers have both made substantial office development investments in Salford’s enterprise zone. Laser Richmount have paid £20m for building two in AMEC’s Anchorage development, while Charter Group’s Five Exchange Quay will launch the £17.9m Property Enterprise Trust 12.

The 114,000-sq ft AMEC building has space on ground and nine upper floors and a 10-storey glazed atrium. It is due for completion next summer and will be let at £15 per sq ft. Laser Richmount Trust offer “private and corporate investors the opportunity to take a stake in quality commercial property for as little as £5,000”. Investors benefit from tax relief available on the building costs of investments in enterprise zones. AMEC have fully underwritten the trust and have guaranteed that the land cost (not eligible for tax relief) will not exceed 2.5% of the total purchase price. This means that investors will get tax relief on 97.5% of their investment.

The deal has been priced to yield 7.25% pa — 11.9% after tax relief at the upper rate. Quarterly rental income is guaranteed by AMEC for up to 25 years with five-year upward-only reviews.

PEM’s acquisition is the 13-storey Five Exchange Quay which will be completed next November. The 78,323-sq ft property is the third building in the development to be purchased by the trusts. Investors will receive an initial gross yield of 7% (6.75% after the deduction of annual management and costs). After tax this is equivalent to a net yield of 11% for the income tax payer and 10.2% for the corporate tax payer. The property has been acquired with a 30-year leaseback to the developers with initial rents guaranteed at £16 per sq ft. These rents will be paid to investors from the date of their investment and in proportion to the number of units which they hold in the trust.

Commenting on the purchase, PEM’s managing director, Keith Evans, said he believed that quality of property was now the all-important ingredient in guaranteeing the success of such trusts.

“We have again succeeded in acquiring a property constructed to the highest institutional standards by developers whose track record in enterprise zones is second to none.”

by Duncan Lamb Tax shelter experts Laser Richmount and Property Enterprise Managers have both made substantial office development investments in Salford’s enterprise zone. Laser Richmount have paid £20m for building two in AMEC’s Anchorage development, while Charter Group’s Five Exchange Quay will launch the £17.9m Property Enterprise Trust 12. The 114,000-sq ft AMEC building has space on ground and nine upper floors and a 10-storey glazed atrium. It is due for completion next summer and will be let at £15 per sq ft. Laser Richmount Trust offer “private and corporate investors the opportunity to take a stake in quality commercial property for as little as £5,000”. Investors benefit from tax relief available on the building costs of investments in enterprise zones. AMEC have fully underwritten the trust and have guaranteed that the land cost (not eligible for tax relief) will not exceed 2.5% of the total purchase price. This means that investors will get tax relief on 97.5% of their investment. The deal has been priced to yield 7.25% pa — 11.9% after tax relief at the upper rate. Quarterly rental income is guaranteed by AMEC for up to 25 years with five-year upward-only reviews. PEM’s acquisition is the 13-storey Five Exchange Quay which will be completed next November. The 78,323-sq ft property is the third building in the development to be purchased by the trusts. Investors will receive an initial gross yield of 7% (6.75% after the deduction of annual management and costs). After tax this is equivalent to a net yield of 11% for the income tax payer and 10.2% for the corporate tax payer. The property has been acquired with a 30-year leaseback to the developers with initial rents guaranteed at £16 per sq ft. These rents will be paid to investors from the date of their investment and in proportion to the number of units which they hold in the trust. Commenting on the purchase, PEM’s managing director, Keith Evans, said he believed that quality of property was now the all-important ingredient in guaranteeing the success of such trusts. “We have again succeeded in acquiring a property constructed to the highest institutional standards by developers whose track record in enterprise zones is second to none.”