Investors interested in putting money into commercial property in the Republic may be interested in a new fund being promoted by Gunne Commercial and NCB Stockbrokers. Potential investors are required to make a minimum investment of £50,000 (€63,487), up to a maximum of £500,000.

The fund will comprise £10 million raised from investors and will in turn borrow £15 million to invest in commercial property. This structure is designed to make it tax efficient for investors, with all income and capital gains tax paid by the fund at the standard rate of 22 per cent.

Interest is paid out of gross income where relief is available. The fund aims to achieve above average returns by investing in well-located commercial property in modern office, retail and industrial space.

The borrowings will be arranged by the fund on a non-recourse basis, which means that the maximum potential loss for the investor is the amount of capital invested. The fund will run for seven years at which point all of the properties will be sold.

Over seven years, the promoters indicate an investment of £100,000 will yield a return of £148,000. All payments will be made after tax is deducted. There is an annual management charge of 2 per cent of the value of your investment. An additional 5 per cent charge is levied for rent collection. A sliding early encashment charge of 1 per cent of the fund value for each year will also apply.