A SIPP or Self Invested Pension Plan, is a scheme that allows holders to invest in a variety of assets, including commercial property. In order for a property investment to be considered 'SIPP friendly' or 'SIPP approved' it has to meet a number of strict criteria, these include :
- Usually Below Market Value - Reduce capital risk
- A confirmed income stream - e.g. guarenteed rent
- Exit strategies - such as buy back schemes
For a trustee to approve a commercial property venture for inclusion in a SIPP, they usually only look at the income stream and exit strategies. If the development does not have these two key criteria, then they are likely to be turned down as a suitable investment. Any potential capital growth is not taken into account, but risk to capital value is, hence the requirement for the asset to be purchased at below market value.
These strict criteria, mean that an investor has an expert opinion as to whether the development is suitable for investment.
All property investments are available with the same Terms and Conditions whether within or without a SIPP. It is not compulsory to purchase the propeties on this page with a SIPP, but it is an option.