Legal & General Property has announced the final close of its UK Property Income Fund, after securing a further £52m of equity in the last six months.
Since its launch in 2010, LGP has secured commitments totalling £300m from 14 major international institutional investors based in the Middle East, Denmark, UK, France, Finland, Switzerland and Japan.
Including gearing, the fund has a total investment capacity of around £475m.
The “innovative” structure of the closed ended fund allows investors to choose their preferred level of gearing of between 0% and 50% Loan to Value, to accommodate a range of risk appetites.
LGP said the fund “aims to provide investors with returns of 15% (geared) and 10% (ungeared) through careful stock selection of large lot size assets which will be positioned to capitalise on the economic recovery in the
It added that the final split of investors demonstrates demand for both geared and ungeared positions demonstrating for some a confidence in applying debt at the lower end of the risk spectrum, whilst others favouring a pure property exposure.
Charlie Walker, director of business development and the fund’s manager, said: “Against challenging market conditions, in which so many have struggled to raise funds, the significant capital raised from this new base of major global institutional investors not only reflects the attractiveness of this innovative fund structure, but obvious appeal of the fund strategy.
“With a decreasing number of institutional investors competing in the larger lot size segment of the market and a growing supply of chunky, income-producing assets coming to the market, we feel that the UK PIF is strongly positioned to take advantage of short term mis-pricing and a lack of liquidity beginning to surface once again.”
To date, the fund has acquired assets totalling around £200m, including Fremlin Walk shopping centre in Maidstone,
Cushman & Wakefield corporate finance acted as the exclusive placement agent.
bridget.oconnell@estatesgazette.com
