Invesco Real Estate (IRE), the international cross-border property investment manager, is pleased to announce the launch and first closing of a UK real estate fund, its third tactical UK fund investing German-speaking institutional investors' capital into the UK real estate markets.
The Luxembourg-domiciled fund completed its first closing on August 24 with initial capital of 75 mln. from four German institutional investors. With a maximum gearing of up to 60%, this fund provides IRE with approximately 180 mln. of initial spending capacity. Subsequent closings are expected to take place over the next 12 months.
As with the two predecessor funds, the new UK fund will focus on investing across the diverse commercial property sectors of office, retail and industrial and geographically across London and established locations within the UK regions. The fund will have a three-year investment period with a planned lifespan of 10 years and is an income return based fund, which focuses on active asset management in order to increase capital values.
Toby Simon, Director of Fund Management at Invesco Real Estate commented: "We believe now is the right time to re-enter the UK market and access the opportunities that are available by capitalizing on the expected rental growth in the London market as well as other opportunities that exist to take on assets with slightly higher risk related to vacancy and refurbishment, where recent pricing corrections have been less aggressive. While there has been a recovery in UK pricing during 2009 and 2010, values remain well below the long term trend levels and, in our view, continue to offer attractive opportunities as the rental cycle bottoms out."
"The UK market is one of the most mature and professional real estate markets in Europe. This provides a good foundation for efficient implementation of asset management strategies and maximum transparency, coupled with one of the most landlord-friendly lease structures in Europe, thus providing a compelling platform for achieving the fund's investment targets and with the potential to provide attractive income returns to the investors. IRE is ideally placed to activate such a strategy given its constant access to investment opportunities and its active asset management skills, through its dedicated transactions and asset management teams."
Source: Invesco Real Estate