Schroder subsidiary Columbus Capital Management has launched a UK industrial fund with £110m of firepower.
Columbus UK Real Estate II raised £60m in equity in a first close this week , and has secured a £50m loan from a clearing bank at a margin of “under 300 basis points”.
It expects a second and final close by Christmas, giving it £100m of equity with a potential for 60% leverage.
The fund will target an internal rate of return of 15% pa and has a five-year life span, with the opportunity to extend by two years.
Columbus II has an 18-month investment period and will focus on assets in the £3m-£6m price range, to avoid competing with institutions for larger-ticket assets.
It has already bought Houndhill Industrial Park, in Dearne Valley, Rotherham, for £6.2m at a net initial yield of 9.4%.
Investors are around 85% UK and Middle Eastern pension funds, with the rest of the money coming from family offices. Three-quarters of the investors are from the first Columbus UK Real Estate Fund.
The £300m diversified Columbus UK Real Estate Fund closed in August 2011 and is now fully invested.
bridget.oconnell@estatesgazette.com
