JR Capital and Chancerygate have launched a second £150m fund to invest in income-producing multi-let UK urban logistics assets.
The fund’s first close has raised £40m of equity from JR Capital’s Middle East-based private and institutional client base, giving Chancerygate an initial £80m to deploy. Both Chancerygate and JR Capital have co-invested into the new fund.
At the same time, the fund has made its first investment with the acquisition of Port Road Business Park in Carlisle (pictured).
The park comprises 20 units totalling 108,000 sq ft with occupiers including Travis Perkins, Wolseley, Menzies Distribution, NHS and Sky. The asset was acquired for £7.4m and has a net initial yield of 8.1%.
The pair’s first fund, which totalled £100m, secured 18 assets over a two-year period, ranging from Dundee to Exeter and comprised 150 units totalling more than 1m sq ft.
The latest fund has a five-year life and will target industrial, warehousing and urban logistics investments across the UK in lot sizes of £5m to £15m.
JR Capital chief executive John Collier-Wright, said: “We remain bullish on the small-box multi-let sector due to the strength of the occupier market and robust fundamentals.
“We have witnessed first-hand on our previous fund the significant supply-demand imbalance, which has allowed us to maintain close to 100% occupancy and increase rents by an average of more than 25%. The recent volatility in the investment markets has created good buying opportunities for investors like us that are well-capitalised and can transact quickly in cash. We try to be active and buy while others are selling or sitting on the sidelines.”
The fund’s strategy is to acquire a geographically diverse portfolio of assets across the UK, which both generate a secure income stream from a varied tenant base and offer opportunities to add value through active asset management.
Chancerygate managing director Richard Bains added: “The success of the first fund underpinned a period of significant growth for our asset management team. We now manage around £385m of assets across more than 5m sq ft of commercial space in more than 480 units.
“This latest fund provides us with even more firepower that the first. It shows there is ongoing demand from a myriad of entities and jurisdictions for UK logistics property of all types. Investors see past short-term challenges and can perceive longer-term prospects with an asset class they regard as particularly resilient.”
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