Mill Group Residential has revealed its plans to launch the first ever mainstream UK residential REIT via a crowdfunding platform.
The real estate investment, development and management company announced this week that it is planning to launch Mill Residential REIT, which will utilise both crowdfunding and an investor show.
The REIT, which has also recently commenced an investor roadshow to raise capital as part of an IPO, will also be targeting the UK-REIT regime on admission to a UK-based market.
Investors in the REIT will be able to invest with a minimum of £1,000 using the equity crowdfunding platform, SyndicateRoom.
The REIT, which is a real estate investment trust that owns and manages income-producing real estate, is looking to raise over £300,000 from members of the crowdfunding platform, as well as an existing £2 million already committed by Mill group’s management team and their families.
There is also additional capital from investors, wealth managers and private client brokers.
Ian Ellis, the former Chief Executive of Land Securities Trillium, has been appointed as Chairman of the REIT.
Commenting on the launch, Ian said: “Mill Residential REIT will provide investors with a significant opportunity to gain access to the vast and growing UK residential market. With the expertise and track record of Mill Group Residential, we are well placed to take advantage of the significant property opportunities that exist across the UK.
“Renting long term is now the accepted norm for a large cohort of young professionals and new families and the Mill Residential REIT will provide good quality, private rented accommodation in attractive locations where there is strong local demand.”
Commenting on the value of development and refurbishment, David Toplas, Chief Executive of Mill Group Residential, Mill Residential REIT, said: “There is a real scope for value to be added through residential development and refurbishment, using the special tax status of a REIT to both acquire and hold residential investment properties in this fragmented market.
“We have always seen ourselves as innovators in the property and finance space and recognise the role that crowdfunding platforms such as SyndicateRoom can play in helping businesses like ours to raise finance from retail investors who appreciate the total returns from a residential portfolio and want an easy and liquid alternative to a self-managed, Buy-to-Let property.”
“We are keen to establish the REIT and then grow it in a structured and methodical manner. In time we believe that this vehicle can play a small part in helping to consolidate the UK residential investment market.”
The REIT has already bought an initial portfolio of seven properties in desirable locations with a range of value between £180,000 to £430,000, which are substantially let and are generating income.
DFT was told that the REIT will take an opportunistic, value-add approach in order to maximise yield.
Gonçalo de Vasconcelos, founder and CEO of SyndicateRoom, concluded: “A company aiming to be first mainstream residential UK REIT using crowdfunding just shows how sophisticated the industry has become.
“SyndicateRoom has quickly established itself in the marketplace as a preferred option for sophisticated investors and companies alike; we are very pleased that our platform was chosen by Mill Group and their trailblazing approach combining two things high on British agenda: property and investment opportunities."