Investor Today

News Story

New Fund Management mandate to invest GBP 100m in UK commercial property

Tuesday 9th February 2010

By Mike Jones

AIM-listed property fund management firm First Property Group has announced that its principal subsidiary, First Property Asset Management Limited, has signed a contract to establish a seven-year closed ended fund to invest in UK commercial property with a cash commitment of £106million. This follows the announcement at the interim results on 30 November 2009, that FPAM had received indications of interest for in excess of £50million for such a fund.

The fund will be called The UK Pension Property Portfolio LP and the external investors are exclusively UK pension clients of Stamford Associates, a leading international investment consultancy firm. First Property Group plc will co-invest £1million in the fund and will earn annual fees from the fund based on the value of the properties under management, and may also earn additional fees if the fund achieves its performance targets.

The fund has been designed to pursue a core, and sometimes core plus strategy, focusing on well-let but slightly higher yielding mainstream commercial properties with an absolute return objective. The fund will initially be un-geared but may introduce gearing at a later stage, subject to the unanimous approval of the fund investors. The fund will target properties with lot sizes of between £3million and £15million.

The new fund marks a significant step in the growth of FPAM and, once invested, the cash commitment will represent an approximate 30% increase in assets under management to approximately £400million (Sep 2009: £296million). This will be FPAM's eighth fund and its second major institutional fund, the first being for the Universities Superannuation Scheme.

Ben Habib, Chief Executive of First Property Group plc, said: "We are extremely pleased to have secured this new UK fund; not only does it mark a more substantial return to the UK for us, it is also an important milestone in our growth. Our focus in the coming months will be to invest this new UK fund; indeed we have already identified initial acquisitions."

Have your say on this story using the comment section below