Cordea Savills has raised £25m of equity at the first close of its Prime London Residential Development Fund.
The fund manager said that the investment came from an undisclosed “major global private bank”.
It added that there will be further closings of the fund over the next 12 months, with a second close planned for August with an Asian private bank.
The fund has been set up to provide finance to developers for prime London residential property and will target an internal rate of return of 18-20% pa.
Investment director Patrick Carr said: “The next 18 months are going to be an extremely interesting time to be an investor in this market, whether that means providing debt, equity financing, or buying completed developments for their further growth potential.”
Prime London residential property has outperformed other UK property sectors over the past 20 years in terms of capital growth and is forecast to deliver an average total return of circa 9% pa over 2012-16, according to Cordea Savills.
The vehicle is a sterling-denominated closed-ended English limited partnership with a Jersey feeder. It will have a term of four years with the option to extend by a further two years and will be able to use gearing where appropriate.
bridget.oconnell@estatesgazette.com
