Yahoo Finance Property rental company launches 6pc retail bond
A company that invests in student and buy-to-let properties has launched a retail bond that pays 6pc interest. The company, Select Property Group, owns and manages student property and serviced apartments under the Vita Student, Affinity Living and CitySuites brands.
Vita Student offers high-end student accommodation, predominantly to overseas students or post-graduates, while CitySuites offers serviced apartments available for short-term rentals. Affinity Living rents luxury flats to young professionals.
The firm's retail bond will pay interest twice yearly at a annual rate of 6pc. The bond matures in October 2023 and the minimum investment is £2,000.
It is the first retail bond from the company. Select Property did not state how much it intended to raise or what it would use the money for, apart from to "support the continued development of our business".
Retail bonds are not covered by the Financial Services Compensation Scheme, but they are more heavily regulated than mini bonds.
However, consumer group Which? has previously warned that Select Property Group hid the risks of investing in property from potential investors.
An investigation by Which? looked into property investment companies that regularly appeared in Google searches for "property investment". It mystery-shopped Select Property Group and three other firms, posing as a potential investor.
It found that Select Property was not clear about the risks involved and dismissed concerns about properties dropping in value.
Select Property previously had a large business in Dubai, but was hit when the country's property bubble burst. At the time it scaled back its investments there and cut staff. It has now focused on UK markets instead.
Investors who want to buy the bonds can do so through brokers AJ Bell, Saga Share Direct, Selftrade and Shareview. The offer period is expected to close at midday on October 5.
