What are the fees paid by investors?

The fees relate to services that Property Partner provides:

1. Sourcing and diligencing investment grade property deals, often with significant discounts, by an in-house team of property professionals.
2. Ensuring that properties are let, managed and maintained to a high standard, and distributing monthly dividends to investors.
3. Delivering an end-to-end managed investment, including sourcing and arranging mortgages, corporate structuring through SPVs, financial statement preparation, corporate tax and VAT compliance, and adhering to regulatory and client monies protection requirements.
4. Providing a technology platform that facilitates online investment management and reporting, on an FCA-regulated trading exchange, allowing investors to trade their investments 24 hours a day, 7 days a week.

1. Assets Under Management Fee

 From 5 August 2019 we will introduce an AUM Fee (assets under management).

The AUM fee is based on the equity value of each property’s latest independent valuation (“equity value” refers to that part of the property’s value that is owned by clients i.e. does not include the mortgage).

The AUM fee will amount to 1.2% per annum on portfolios valued up to £25,000 and 0.7% on the portion of portfolios valued over £25,000.  See table below, which illustrates the calculation and impact of the fee on investors’ portfolios.

The AUM fee will be applied to each property SPV, reducing monthly dividend distributions.

This fee only applies to investments in property equity, not development loans.

The AUM Fee will be drawn from each property SPV at the standard rate of 1.2% p.a. on a monthly basis, before dividends are paid. Clients with portfolios of shares valued at more than £25,000 will subsequently receive a cash rebate to reduce the AUM Fee paid on the portion of their portfolio over and above £25,000, to 0.7%. This will be paid into your available funds by the 11th of each month, or the next working day.

Clients with portfolios valued at £325,000 or above on 5 August 2019 will receive a cash rebate to cap the total cost of the AUM Fee across this portfolio at £200 per month. Additional shares acquired after 5 August 2019 will be subject to the AUM Fee at 0.7% p.a.

Any shares owned on 15 July 2019 that a client sells on the Resale Market before 5 February 2020, will automatically receive a rebate of the AUM fee that has been paid on those shares sold.

The table below shows the impact of this fee on investors’ portfolios:

Notes

1. Portfolio valuation is determined each month at the same point at which investor's holdings are determined for dividend payment purposes; dividends will continue to be paid on the 5th of each month and the AUM fee will also be reflected in investor's accounts on the 5th of each month. Your portfolio valuation is based on the latest independent valuation by a RICS chartered surveyor.

2. Tier 1 AUM fee of 1.2% p.a. is charged monthly to every property SPV before dividends are paid

3. The AUM fee is subject to VAT and is a tax deductible expense from each property SPV; consequently, the net cost to investors is slightly less than the headline rate of 1.2% p.a. in the table above

4. A cash rebate is paid to investors to reduce the Net AUM fee paid on portfolio holdings above £25,000 to 0.7% p.a.

5. Portfolios valued at £325,000 and above on 5 August 2019 will benefit from an AUM fee cap of £200 per month; this benefit only applies to the shares in the portfolio at 5 August 2019; all shares acquired after 5 August 2019 will attract the Standard AUM fee of 1.2% p.a. and the AUM fee rebate for portfolios amounts above £25,000

6. Account fee is £1 per month + VAT for all account holders - see description below

2. Account Fee

The Account Fee is a monthly charge applied to client accounts holding investments or cash.

The charge is £1.00 per month + VAT, and charged to your account on the 5th of the month.

New investors will only be required to pay the fee once an investment has been made, or after depositing funds and a period of three months has passed.

In the event that your account has insufficient funds available to pay the Account Fee, the Account Fee shall accrue on a monthly basis and be deducted once you have available funds in your account.

This fee is only applicable to clients with investments or deposits on account.

3. Transaction Fees

Investors pay a maximum of 2% transaction fee on investments, calculated on the value of the investment amount. Investors can benefit from reduced transaction fees in the following instances:

New Listing Property Investments

• Premium clients have the opportunity to invest during Early Access, during which 0% transaction fees will be paid. Terms apply.
• All investors have the opportunity to invest with 1% transaction fees during the first week of live funding. Terms apply.

Development Loan Investments

• All development loan investments have a 2% transaction fee.

Resale Market Investments

• In January 2019 we implemented a trial fee structure on all Resale Market investments, reducing the transaction fee when buying shares from 2% to 1%. This fee structure has been extended until 7 October 2019. This reduction is not valid on Investment Plans or our Discretionary Managed Services, where the fee is 2% (effective from 1 August 2019).

4. Sourcing Fee

We add a Sourcing Fee to the Purchase Costs for New Listings.

The Sourcing Fee is 3.0% + VAT of the purchase price; this is disclosed in the ‘Financials’ section of each New Listing.

For the avoidance of doubt, we previously charged separate Sourcing and Vendor Fees, which combined, amounted to 3.5% + VAT of the purchase price - we no longer charge the Vendor Fee.

5. Selling Shares

There are no fees to sell shares.