Aberdeen Asset Management has raised $150m (£103m) for a new European conversion-to-residential fund.
The fund manager is looking to take advantage of the drop-off in competition from housebuilders, concerned about sales and holding stock on their books.
Aberdeen raised the capital for the Aberdeen European Residential Opportunity Fund from a broad range of Asian investors, mainly from Singapore and Hong Kong.
The fund is aiming for a return of around 15%, using gearing in the region of 50%. It will have a seven-year life with two one-year extension options. Its UK fund manager will be Ed Crockett.
The fund will buy offices, supermarkets, car showrooms, bingo halls and cinemas to convert and will target projects with gross development values of about £50m.
It will target cities with rapidly expanding populations, but will not invest in prime central London.
Aberdeen is active in the private residential sector in Sweden, Germany and the UK, where it owns £250m of assets.
It will exit its investments by either selling on after achieving planning, developing its own private rented sector product and selling to an institutional investor, or selling flats piecemeal.
Converting its assets to office buildings has been a successful ad-hoc strategy for Aberdeen in recent years within its other funds.
In 2014, it sold the former BBC London offices at 35 Marylebone High Street, W1, to the Royalton Group for £75m, for which it gained planning
consent for conversion to 19
flats and five townhouses.
It is also selling the 41 flats at its Ash House scheme in Staines, Surrey.
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