Alternative real estate investment manager Newcore Capital Management has announced the launch of Newcore Strategic Situations II, a £25 mln (€32 mln) opportunistic fund that will invest in UK real estate assets that are linked to social infrastructure, storage and accommodation.
Newcore said it has secured equity commitments for the fund, its second, from a number of family offices.
The fund will have a four-year life and aims to deliver a 14%-16% internal rate of return and a 1.5 equity multiple. It will target ‘strategic situations’, which are likely to include planning plays and refurbishment opportunities and may also include development.
Newcore has already agreed to invest 20% of the fund in the acquisition of a healthcare and judicial building in Sutton, south west London. The firm has purchased Copthall House, Sutton, from Immobilien Beratungs und Anlagen and Bavaria Immobilien Trading for £5.9 mln, reflecting a net initial yield of 6.2%.
Copthall House comprises 39,240 sq ft (3,645 m2), of which three quarters is leased for primary healthcare and judicial office uses and a quarter is vacant, providing asset management opportunities.
Newcore’s first fund, Newcore Strategic Situations I, delivered a total unleveraged return of 31.6% in 2015 and total unleveraged returns of 26.9% since inception in June 2013.
