Friday, 27 February 2015
Barwood Capital launches new €68 million UK regional commercial property fund (UK)
Barwood Capital, one of the leading real estate asset and investment managers, focused on the UK regional markets, announces that it is seeking to raise £50 mln (€68 mln) for a new five year fund, providing a total investment capacity of up to £200 mln (€275 mln) including leverage and the reinvestment of proceeds.
The Fund, which is targeting an investor IRR of 15% per annum, has already received commitments of over £25 million (€34 mln) from current investors in Barwood’s existing property funds. It is intending to close in April 2015 and Executives from Barwood will also personally co-invest over £1 mln (€1.38 mln) providing alignment with clients. Barwood’s approach is to provide its investors with a real sense of asset ownership, yet enable them to spread their risk across a portfolio that is actively managed on their behalf, as well as a personal relationship and attention from senior accessible staff who truly understand the market.
The Fund will target underperforming commercial real estate assets with lot sizes of between £3 million-£20 million (€4 mln - €27.5 mln) in UK regional markets and across all asset classes. Investment yields for secondary stock outside London remain significantly higher (i.e. prices of these assets are significantly lower) than prime assets in these regional markets with a spread of nearly 4% between prime and secondary stock yields. Barwood Capital, acting in its capacity as investment and asset manager to the Fund, will secure undervalued and under managed regional stock before adding significant value through asset management, planning gain and development, and then sell these improved assets into the buoyant and improving prime market, taking advantage of the positive arbitrage between primary and secondary assets.
The new fund launch follows Barwood’s recent announcement that it has formed db symmetry, a new UK logistics joint venture between Barwood Developments Limited and clients advised by Delancey. db symmetry is focused on large logistics assets with lot sizes greater than those considered by the Fund.
Joanna Greenslade, Managing Director of Barwood Capital, said: “We have a proven track record in delivering value to investors across market cycles, as well as a highly experienced team of professionals who are deeply embedded in the regional markets. Against a backdrop of a recovering economy and increasingly liquid market for high quality UK regional assets, we will look to identify underperforming assets before adding significant value, through letting up vacant space, achieving implementable planning permissions or programmes of refurbishment and development.
Source: FTI Consulting