Almost £2bn of funds closed this week with a fresh focus on UK property.
Patron Capital has closed its fifth fund with €949m (£793m) raised for European investment, with 40% targeting the UK, while Madison International Realty closed a $1.4bn (£1.1bn) fund with a primary focus on London.
Keith Breslauer, founder and managing director of Patron, said: “The new fund was originally targeting to be less in the UK, but in light of Brexit, we will be doing more in the UK.”
The 10-year fund, with 60% gearing and a projected IRR of 25%, will focus on office and residential assets that, Breslauer said, had been undervalued.
He added: “Brexit has put a big question mark on the future economic health of the country and, therefore, tenant demand in, say, office buildings in the Midlands and the regions. With weaker secondary assets, we are hopeful that we are seeing a slowdown of pricing, if not a removal of the froth that existed.”
Ronald Dickerman, president of Madison International, said: “We are still looking for quality, so London is very much still on our list. We are still very bullish.”
He added that the company, whose holdings include a stake in Devonshire House, W1, believes properties had been undervalued since the referendum.
“It was amazing how few people were putting any emphasis on Brexit as a likely outcome. All of a sudden, Thursday night, Friday morning, Land Securities opens 30% down. I would argue that office buildings in London did not lose 30% of their value,” he said.
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