Property investment and management company Sandstone has launched a new real estate investment trust (REIT) as it seeks to expand its client base.
Listed on the Guernsey Stock Exchange, the Sandstone REIT will focus on traditional residential properties for rental in 10 cities across the UK. Peter Grant, who founded Sandstone in Scotland in 1997, said the trust will allow new groups of clients such as family offices, institutions and charities to invest in a market where demand is being fuelled by students and young professionals.
“We are already seeing interest from client groups in the UK and Europe, as well as Singapore, Hong Kong and across Asia,” he said.
“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 rewards.”
READ MORE: Grant opts for Sandstone as new REIT venture unfolds
Originally known as Grant Property, Sandstone has helped clients from 40 countries build their own portfolios with investments into 3,000 properties, representing a net asset value of about £1 billion. The company also assists with renovation, furnishing and ongoing rental and management.
Mr Grant noted that the company has achieved returns of 28 per cent per annum over the past 25 years, based on 75% loan-to-value gearing. Despite the difficulties of the pandemic, occupancy in the portfolio has been above 95% with rental income up by 12% last year.
“The combination of great locations, modern interiors, high safety features and low energy costs all result in student tenants typically staying for two to three years,” he said. “That’s also a win-win for landlords.
“These factors paired with the strong market and our experience of working within it for over a quarter of a century underpins the Sandstone Residential REIT. It also dovetails with the UK Government’s aim to help professionalise the private rental sector.”
The company started heavily courting overseas investors in the wake of the 2008 financial crash, when it was forced to downsize from about 140 to 50 members of staff. It now employs about 75 people across 10 UK offices.
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