AEW has announced a change in investment strategy for its top performing UK Core Property Fund, which includes increasing the maximum leverage capacity of the fund to 30% of the value of the Fund’s assets.
The Fund will also be renamed the AEW UK Core Plus Property Fund (the Fund). As part of the migration, a significant new investor has committed to the Fund, AEW said.
The Fund will seek to capitalise on market inefficiencies and acquire attractively priced and high-quality multi-sector commercial real estate at the margins of prime locations across the UK, with the aim of achieving superior investment returns over the long term.
Following the change in strategy, the fund has bought four high-yielding assets; Harbour Island, a well located, office and retail asset in Canary Wharf for £18.2 mln, reflecting a NIY of 8.2%; Hythe Marine Park in Southampton, a 12.6 acre freehold marine services industrial estate, for £14 mln reflecting a NIY of 9.2%; Barton Court, in Bath, a mixed use island site corner block for £8.25 mln reflecting a NIY of 12%; 3 Queens Square, for £705,000.
The Fund’s investment objective is to provide a return from capital appreciation and income over the longer term and to deliver, over time, a total return in excess of 8% per annum.
Richard Tanner, senior portfolio manager said: ‘We are very excited about the evolution of what is now called the AEW UK Core Plus Property Fund, which will allow us to take advantage of the price dislocations we are seeing in the commercial property market. The high yielding acquisitions recently completed are evidence of our commitment to seeking out attractively priced properties where we can leverage our proven active management capabilities and deliver value for both investors and tenants.’
