Barwood Capital — one of the UK’s leading real estate asset and investment managers — has launched a new £50m fund aimed at regional commercial property. With leverage and reinvested capital, the five-year fund will have an investment ceiling of £200m.
The fund — which will close next month— immediately attracted more than £25m from Barwood’s existing property fund clients. Executives from the Northampton-based company also pumped £1m of their own money into the vehicle, expected to produce a return of around 15 per cent.
The fund will consider underperforming commercial real estate assets valued at between £3m and £20m outside London and across all sectors. High net worth individuals and professional and institutional investors are expected to be the main contributors.
“We have a proven track record in delivering value to investors across market cycles, as well as a highly experienced team of professionals who are deeply embedded in the regional markets,” explained Joanna Greenslade, managing director of Barwood Capital.
“Against a backdrop of a recovering economy and increasingly liquid market for high quality UK regional assets, we will look to identify underperforming assets before adding significant value through letting up vacant space, achieving implementable planning permissions or programmes of refurbishment and development,” she said.
Barwood Capital, acting as asset manager to the new fund, will then sell these improved assets into the buoyant and improving prime market, “taking advantage of the positive arbitrage between primary and secondary assets”.
The fund launch follows Barwood’s recent announcement that it has formed db symmetry through the purchase of a 60 per cent stake in Barwood Development by clients advised by Delancey, the specialist property investment and development advisers. Barwood management team has retained the remaining 40 per cent share.
db symmetry will focus on large logistic assets with values outside the scope of Barwood’s new fund. It joins the market with an existing 1,330-acre portfolio of strategic land holdings, with an estimated development value of more than £1.4bn. By 2019 planning consent is expected on 20-million square feet of logistics projects concentrated around the UK’s main motorway arteries but primarily around the M1 and M40’s “Golden Triangle”.
