Palmer Capital has secured £225m for the launch of its biggest fund, the Palmer Capital Development Fund IV, the next vehicle in its value-add series with CBRE GIP Global Investment Partners.
Building on the success of PCDF III, which invested £175m equity in 15 projects between 2014 and 2016, the new fund will have a four-year duration with a two-year investment window.
The vehicle will target a 15% IRR to CBRE GIP investors and has already secured its first three projects.
This includes acquiring 125 acres of land on the south-eastern outskirts of Ayr in Scotland for £3.4m. The site benefits from a mixed-use planning permission in principle, which permits the development of up to 569 residential units, a 100,000 sq ft Sainsbury’s supermarket, a neighbourhood centre incorporating business space, a 60-bedroom hotel and retail space.
Angle Property has also recently acquired Kingsmead Business Park on Howland Road in Thame on behalf of the fund for £11.3m from Tesco. The site comprises 10.5 acres and the existing industrial and office buildings total approximately 120,000 sq ft. The two principal occupiers are DAF Trucks and Kubota UK. Their leases expire in July 2017 and 2018 respectively.
DAF Trucks has acquired land nearby for a new facility and will be vacating in 2018.
PCDF IV alongside Opus North has also recently completed the purchase of 5.7 acres for a residential development in Spofforth, Yorkshire.
Chris Button, head of value-add real estate investment management at Palmer Capital, said: “We believe that uncertainties in the property market and a flight to prime assets will create buying opportunities for value-add investors, which we are well positioned to exploit.”
Alex Bignell, head of UK, CBRE GIP, added: “The success of the previous funds in the PCDF series made it an easy decision to launch a fourth fund. The partnership between CBRE GIP and Palmer Capital works very well and this is illustrated by the strong returns being achieved for our clients.”
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