Palmer Capital launches fourth value-add fund for CBRE GIP investors

Palmer Capital has launched its fourth value-added UK real estate fund with backing from CBRE Global Investment Partners (GIP).

The Palmer Capital Development Fund IV has raised £225m (€266m) from CBRE GIP, the multi-manager arm of CBRE Global Investors.

The fund will acquire land with a view to securing planning permission for residential development, as well as speculatively develop new regional offices and sheds and add value to standing investments through asset management.

Alex Bignell, head of UK at CBRE GIP, said the track record of the previous funds made it “an easy decision to launch a fourth fund”.

The new fund will target the same 15% target return of the previous vehicle.

Chris Button, head of value-add real estate investment management at Palmer Capital, said that, although it was now later in the property cycle, the firm was confident of delivering returns because of the lack of competition for the type of deals it was pursuing.

“We believe that uncertainties in the property market and flight to prime assets will create buying opportunities for value-add investors, which we are well positioned to exploit,” he said.

The manager’s third fund invested £175m of equity in 15 projects between 2014 and 2016.

The latest fund will have the same two-year investment window.

Leverage of 50% will be used, although Palmer Capital said gearing is likely to be lower.

Around £25m of the fund’s equity has been committed to three acquisitions.

The biggest deal is a £11.3m purchase from Tesco of Kingsmead Business Park in Thame.

 

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