First Property Group has established a new partnership with clients of an investment business to invest in office buildings in the UK with a view to converting these to residential use.
The partnership, which is closed ended, has a life until May 2018.
Clients of the investment business have agreed initially to commit GBP12m with an intention to increase this to GBP40m within three months. First Property Group has agreed to commit five per cent of the total equity raised subject to a limit of GBP2m.
First Property Group will manage the partnership but will not levy any fees for its services. It will instead be paid 20 per cent of the profits earned by the partnership, as these are earned, subject to claw back in the event of losses.
As announced on 22 July 2013, the group has returned to development activity in response to the currently conducive environment for such activity.
First Property Group’s chief executive Ben Habib says: “Central government support for the creation of new housing and its support of the housing market generally mean that the environment for residential development is better now than it has been for many years. There is a housing shortage in the UK and our plan to convert redundant offices into housing makes a great deal of sense.
“I am delighted by the establishment of this new partnership which broadens the group’s institutional sources of capital and for which we have high hopes.”