Fund the future

Investors with a Self-Invested Personal Pensions (SIPPs) who have been prevented from investing in property because of the size of their funds can now join a syndicate.

A new service from Central Financial Planning allows investors with relatively small personal funds to invest in commercial property by getting together with other investors. Until now, it has only been possible to put a personal pension fund into commercial property if the investor is to fund the whole deal themselves, or with the help of a mortgage.

"With the current volatility of stock markets, and low interest rates, commercial property is seen as increasingly attractive to investors," says Ian Smith of Central Financial Planning. "This is especially true when the income stream from the property is long term and well secured - with a good tenant."

In the CFP scheme, a syndicate will be made up of between five and 15 investors. The minimum investment per member will be £50,000. The funds will retain a certain amount of cash to cater for deaths (when the individual's SIPP must be liquidated). The fund can run from five to 15 years, depending on the ages of the investors. The Inland Revenue allows investors to borrow up to 75 per cent of the purchase price, but not all the syndicates will need this.

The initial fee is 0.5 per cent with a minimum of £750 and a maximum of £3,000, plus a management fee of 0.5 per cent a year, reducing to 0.25 per cent for syndicates of more than £1.25 million. Full details from CFP (01527 879555), which is regulated by the Financial Services Authority.