Eight pension funds are looking to tap the cashflows generated by the commercial property market by investing in a new fund.
Fprop Offices is targeting office blocks and business parks across England after raising £182m from the institutions.
If First Property, its manager which invested £3m in the deal, leverages the fund by the 30% maximum loan-to-value ratio allowed it will have £260m of fire power. A further fund-raising is expected by the end of this year.
First Property, which will share the fund’s profits rather than charge fees, has raised £250m since the EU referendum to take advantage of the resulting fall in commercial property values.
First Property chief executive Ben Habib expects to almost double the fund’s third-party assets.
“The UK’s decision to leave the EU has created opportunities on which we, as a niche fund manager, are well placed to capitalise,” he added.
“Our confidence in the fund’s prospects is also demonstrated by our decision to determine our entire economic benefit from it by reference only to the profits it earns.”
