First Property plans fund launch
By Paul Norman - Wednesday, February 22, 2012 7:48
UK and central Europe commercial property fund manager First Property has announced plans to launch a new UK commercial property fund.
The fund, Fprop Sterling Income Fund (FSIF), is expected to follow a similar investment strategy to its UK PPP fund which is close to being fully invested.
UK PPP is an ungeared UK commercial property fund established in February 2010 by First Property on behalf of three pension fund clients of Stamford Associates.
The properties acquired on behalf of the UK PPP fund were purchased at an average net initial yield of 7.5%, with a weighted average unexpired lease term in excess of 12 years and with over 70% of the income let to "D&B 5A1" covenants (the strongest available credit rating by Dun & Bradstreet).
The fund is paying a dividend yield of in excess of 6.4% pa. First Property expects to replicate this investment style and return profile for FSIF.
Ben Habib, CEO of the Group and CIO of FPAM, said: "Securing sustainable high returns remains difficult in most asset classes. I am therefore delighted that we are able to offer investors a relatively secure higher yielding solution with the launch of the Fprop Sterling Income Fund.
“FSIF will seek to mimic the investment style and returns of the UK PPP fund we launched in 2010, on our return to the UK, after having largely exited the UK market at its peak in 2005/7."
First Property Group’s business model is to: raise third party funds to invest in income producing commercial property. It co-invests in the funds and earns fees for the management of the funds.
pnorman@costar.co.uk