Kames Capital has launched its second closed-ended commercial property fund with a £50m investment from West Midlands Pension Fund.
The seven-year Active Value Property Fund II has a target of £250m with a 6.5% yield.
It will focus on properties valued between £5m-£15m in the secondary commercial market particularly outside of London.
Kames said that post-Brexit volatility in commercial real estate has given investors an opportunity to buy good quality secondary assets and add value to them.
Philip Bach, fund manager for Active Value Property Fund II, said: “Following the success of our first closed-ended fund, which we launched in 2013 and raised £275m, the UK Active Value Property Fund II aims to capitalise on the current opportunities we believe are newly available from the fallout of the Brexit vote, available outside of the prime London hotspots.
“We think there remains a lack of supply for good-quality properties outside of London after the last property cycle.”
Mike Hardwick, head of alternatives and fixed income for the West Midlands Pension Fund, said: “The UK secondary property market offers an attractive and stable income yield and provides an effective complement to our existing core real estate holdings.”
Kames raised £275m in its previous Active Value fund in 2014, with assets including a Wickes DIY store in South Shields, Tyne and Wear, bought for £5.5m with an 8% net initial yield.
From December 2013: Kames value add fund makes debut purchase
From October 2013: Kames seeks secondary at £15m or less
