Charities are attracted to property investment because it can provide long-term, sustainable income which meets their charitable aims, along with diversification from other asset classes. Charities also benefit from tax exemption on commercial property purchases (Stamp Duty Land Tax, SDLT - currently 5%).
Our charity sector clients invest through the Property Income Trust for Charities (PITCH) fund which has a track record of progressive returns and outperformance.
By buying tradable units in PITCH with more than £500m of assets instead of purchasing individual properties, charities make their investment less susceptible to tenant failure, building obsolescence and the changing fortunes of the various subsectors of commercial property, whilst retaining their tax exemption from SDLT.
Some charities find themselves as direct owners of commercial property because of bequests or through owning former operational properties that are no longer required. In these instances, if the properties meet the right criteria, we can transfer them into PITCH in return for income-producing units in the fund. This is called an 'in specie' transfer of assets.
In situations where charities are holding substantial portfolios of direct commercial property assets we are also able to provide specialist advisory and asset management services to assist with the maximisation of income returns and protection of capital values.