St Bride’s Managers has raised £75.3m for a new fund focusing on the UK regions.
The firm, headed by former ING Real Estate Investment Management chief executive Robert Houston, will focus on five key towns and cities in each of the three main commercial sectors: offices, industrial and retail.
Leeds, Bristol and Manchester feature in its picks for all three and Edinburgh for office and retail. It also favours Cambridge offices, Guildford retail and Cardiff and Milton Keynes industrial.
The fund will buy assets of between £3m and £7m, be ungeared and target a 6% net return. It has the ability to make mixed-use purchases as well as concentrating on the main sectors. Investments will be made over a three-year period and the fund has a seven-year life.
The investors are made up of local government pension funds and St Bride’s. It will be ungeared, as the funds that are investing can utilise extremely cheap debt through central government. It will target a return of 6% net of all fees.
Ian Houston, partner at St Bride’s, said: “For some time, we have considered the traditional ‘catch-all’ regional approach to property portfolio diversification to be unreliable. We therefore measured and ranked 65 UK cities and towns for their long-term sustainability and vitality to determine our favoured long-term cities.”
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