A multi-billion pound pension fund has set aside £50m for commercial property development on the west coast of Scotland. Strathclyde Pension Fund — which has an estimated £14bn under management on behalf of more than 200 employers and 200,000 public sector workers including the majority of Glasgow City Council staff — has confirmed it is establishing a new £50m fund focused on the area.
The new Clydebuilt vehicle will target properties across the former Strathclyde area with the aim of generating returns for the pension fund and possible spin-off benefits including the regeneration of property in run-down disadvantaged areas and the generation of jobs. It also hopes to attract inward investment European companies.
The convenor of Strathclyde Pension Fund and Glasgow city treasurer is Councillor Paul Rooney. “We always look to deliver for our members who are saving for their futures,” he said, “but this fund has also been designed to deliver a real boost for the economy along the west coast.”
The new equity fund will be administered by Glasgow City Council. Traditionally, the Strathclyde Pension Fund has focused on investments in excess of £10m not just in Scotland but anywhere in Britain. Clydebuilt will restrict itself to commercial properties and developments costing less than £10m and situated only within the target region.
“Pension funds have been a little shy of infrastructure projects, not because they are poor investments, but because they were rarely structured in a way that was particularly accessible or attractive to us as investors,” Rooney added. “Clydebuilt aims to redress those issues.”
The pension fund has appointed Scotland’s Ediston Real Estate to manage Clydebuilt, which will be supplemented by £25m of debt. The firm’s chief executive, Danny O’Neill, said Clydebuilt will invest in property that is out-of-favour with large institutional investors and which the property specialist can improve.
The former Standard Life property fund manager also confirmed Ediston will invest an undisclosed amount in Clydebuilt. The property developer’s £100m portfolio includes an office in Aberdeen and the Heathfield Retail Park in Ayr. One of its most recent transactions was the acquisition of Robroyston retail park in Glasgow for £14m from Dawn Group.
