Newcore Capital is seeking to raise £375m (€433m) for a new core-plus UK real estate fund.

The manager specialising in social infrastructure said the Newcore Sustainable Income Trust, due to launch by the end of 2023, will focus on acquiring fully functional real estate assets at “sustainable prices, to create a diversified, income-producing portfolio, using leverage of up to 30% loan-to-value ratio”. 

Newcore said it has already identified a circa £300m pipeline of potential assets for that fund which will mainly target London and South East England, as well as regional centres with “strong local economies”.

Newcore Sustainable Income Trust’s sectors of focus include education, waste management, medical research and pathology, storage, clinical healthcare, and transport, the manager said, adding that the fund will target an internal rate of return of 9%-11% per annum, with a 5% annual dividend.

The fund will be semi-open-ended with structured liquidity flows for primary redemption and new capital raising, the manager said. 

Hugo Llewelyn, CEO at  Newcore Capital, said: “The dislocation in the capital markets creates an attractive opportunity in social infrastructure real estate for experienced investors looking to create core strategies of scale.

“The Newcore Sustainable Income Trust will be structured to allow five yearly primary redemption windows to investors, which we think will better serve investors than open-ended real estate funds with daily or monthly liquidity where there can be a liquidity mismatch in weaker markets.”

Back in May, Newcore raised £190m at the close of its value-add fund, Newcore Strategic Situations V.

Neil Sarkhel, COO at Newcore Capital, said:  “Institutional interest in social infrastructure assets, a segment of the UK real estate market not always targeted by traditional managers, has been demonstrated by the successful fundraise for our latest value-add vehicle – our largest to date. 

“Our new core-plus fund will replicate our previous strategies at scale, aggregating hard-to-access, granular assets to create a diversified, resilient portfolio that commands an agglomeration premium and delivers reliable, steady returns for our investors.” 

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