SIPP 4 – Business Park Torquay
Purchased in March 2004 for £2.14 million, this building is in Torquay, Devon, situated between Marks and Spencer and the County Court.
These quality offices are let to Nat West Bank and within 24 months of ownership we were able to increase the rent from £146,000 to £154,000. This was not expected! The lease runs to 2019 and Nat West in effect guarantee the rent under ‘privity of contract’.
Not only has the mortgage reduced under the repayment terms, but the value has also increased. More importantly, an investor that put in £50,000 to the syndicate will receive an annual income of £7,820 (subject to inland revenue maxima) upon mortgage repayment, estimated to be in 7 years time. That is a rate of 15.64 % per annum.
The Nat West pay the rent, which we use to repay the mortgage with Nat West – an unusual situation, but beneficial to the syndicate members.
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