AEW has closed its Urban Real Estate Fund, which focuses on underutilised retail properties, at £171m.
The amount was raised from institutional investors. The fund has also secured an initial £30m debt facility. So far it has invested in nine retail assets, committing £133m of capital, with a further three under offer totalling £16.2m.
The portfolio comprises underutilised retail assets located in urban areas in the South of England and major UK conurbations. Acquisitions include properties in Bristol, Windsor, Reading, Brentwood, Coventry, and Watford.
The fund’s strategy is to actively manage the income stream and drive returns through asset management, which includes refurbishment, repositioning and possible change of use or extension. It aims to revitalise properties through a range of uses including health and fitness, entertainment and leisure, food and beverage, health care, living, offices and hotels.
UREF is the second UK value-add fund launched by AEW, following its South East Office Fund.
AEW highlighted the “compelling buying opportunity” that has been created by the acceleration of market trends over the past two years.
Nick Winsley, managing director and senior portfolio manager at UREF, said: “As the UK high street accelerates its shift away from retail towards mixed use units, there is an opportunity to repurpose assets and support the regeneration of town centres.”
Charlie Royle, director and portfolio manager at UREF, said: “We are excited by the opportunity that currently exists in the sector and the ability to support social change in the urban environment, working with local authorities and key stakeholders.
“Through careful investment and diligent asset management we aim to secure the fund’s target returns for our investors, whilst addressing the needs of local communities.”
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