International property fund manager Cordea Savills has launched an open-ended UK commercial property investment vehicle targeting a size of £1 bn (EUR 1.14 bn). The Cordea Savills UK Income and Growth Fund will invest in prime assets offering secure income streams across the main commercial sectors, including office, retail and industrial.
International property fund manager Cordea Savills has launched an open-ended UK commercial property investment vehicle targeting a size of £1 bn (EUR 1.14 bn). The Cordea Savills UK Income and Growth Fund will invest in prime assets offering secure income streams across the main commercial sectors, including office, retail and industrial.
For offices, the fund is targeting London and the top six UK cities; for retail it is focusing on retail warehousing in areas of undersupply and large catchments; and for industrial the key drivers are proximity to motorways, underlying land value and long occupational leases. The maximum leverage will be 30% loan to value of the gross asset value.
The fund has already had its first close with three investors, including Aviva Investors, as well as another leading global multi-manager and a European pension fund. It intends to distribute returns in excess of 5% as well as capital growth over the longer term.
'We are launching this fund in response to investor demand for a low-geared core fund with a transparent structure and no legacy issues,' said Michael Flynn, head of Institutional Business at Cordea Savills. 'The fund, with its stable income bias, aims to deliver outperformance against the property market over the longer term whilst being risk-averse.'
