Kames Capital has secured its first property for the newly launched GBP115m closed ended Kames UK Active Value Property Fund.
The fund, which was launched in October 2013, has secured the Wickes DIY store in South Shields, Tyne and Wear for GBP5.5m, reflecting an eight per cent initial yield. The property is let to Wickes on lease with 15 years remaining.
The property is consistent with the investment strategy of the fund which targets good quality secondary assets, particularly those properties in the GBP2m to GBP15m price bracket.
Kames, which has been running its Active Value property strategy for nearly four years through the open-ended version of the fund, believes that outside of the prime London markets it is possible to deliver attractive returns for property investors by picking good quality assets, which offer attractive income returns whilst also offering good asset management potential.
The team has circa GBP50m of assets for the fund under offer and many further assets which they are considering. These assets are across all the main sectors of office, retail and industrial and are located across the UK.
Kames UK Active Value Property Fund manager Helen Batten says: “This property is a good example of the ‘value’ opportunities we believe are available in the market. It offers a long lease with a good covenant and an attractive yield whilst also providing asset management opportunities.”
The closed-ended UK Active Value Property Fund has a seven year life with the opportunity to extend for a further two. The fund structure is a Jersey Property Unit Trust. It is targeting initial yield of eight to 10 per cent.