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US property market a volatility shield

The United States residential property sector can provide shelter for SMSF investors from the volatility and speculation currently affecting equity markets around the world, according to a global fund manager.

Specifically, Spire Capital has identified essential and affordable residential rental properties in the US as an asset class providing present-day strong returns with a 15-year upside as well.

The manager’s assessment of the residential rental property sector is supported by the US Urban Land Institute’s prediction 59 per cent of all new home formation would be rental accommodation over the next one-and-a-half decades.

“Our funds invest in essential and affordable residential rental accommodation in the USA, driven by demographic and societal trends that are largely immune from the macro events that affect equity markets,” Spire Capital director Dale Holmes said.

The manager’s Real Estate Opportunity Capital Fund is an offering giving Australian investors access to multi-family apartment communities and office building investments in the US.

The fund was launched in April 2013 and has generated a running annual yield of 7 per cent to 8 per cent, with the aim to deliver a total return of 20 per cent a year.

It has received a highly recommended rating from Zenith Investment Partners.

“Investors have underestimated the impact of the GFC (global financial crisis) coupled with societal shifts and the functional obsolescence of existing apartment stock in the US,” Holmes said.

“[Spire’s] ROC funds provide investors with high-yield and total returns whilst providing diversification benefits in a portfolio.

“The ROC funds invest in value-add residential rental apartment communities and seniors housing driven by the ageing population.”

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