Cordea Savills has been appointed as property adviser to The Bishopsgate Long Term Property Fund Unit Trust with a mandate to establish a new UK core balanced commercial property fund.
The mandate was won via a competitive tender process. The fund’s initial focus is on assets offering secure income characteristics in prime locations.
George Tindley (pictured), head of UK investment, says: “With the UK commercial property market still some way off the market peak in 2007, and with the gap between gilts and initial yields at a 25 year high it is a particularly exciting time to be awarded such a mandate. It is always challenging to source the best quality assets but our opportunity here is to construct a portfolio with no legacy and a fresh strategy. We will be pursuing a conservative acquisition strategy in the initial stages with a strong focus on income, quality covenants and the prospect for capital growth in the medium term.”
The fund was launched on 30 November 2012, and has just acquired its first property being 101 St Martins Lane, a multi-let office building in London’s Covent Garden, for GBP32.4m. The property comprises 49,000 square feet of Grade A office space and a self-contained ground floor retail unit. The acquisition price reflects a net initial yield of 4.6 per cent that is expected to increase to in excess of 6.25 per cent once the first floor of the property has been let. The fund has a further GBP40m under offer including a retail asset in Glasgow and a well located food store.
Patrick Lowther, portfolio manager, says: “The fund has GBP250m to invest during 2013 and is targeting investments with a lot size of between GBP10m and GBP30m with yields of 6.5 per cent plus in order to complement the recent investments.”