14:45 | 09.09.09
By Neil Spike
Hamilton Bradshaw, the private equity business of serial entrepreneur James Caan, is planning the launch of a new UK commercial property fund in partnership with ING Real Estate Investment Management (ING REIM). The Hamilton Bradshaw Diversified Property fund will launch in the early autumn, exact date to be confirmed.
The fund will focus on prime commercial real estate across the UK, employing a conservative investment strategy that targets properties with strong covenants and long leases which can deliver stable cash flows.
Hamilton Bradshaw will act as a property adviser to the fund, with ING REIM acting as Fund Manager.
"I believe the commercial property market is as attractive as it has been in the last few years," commented James Caan, who is also backing the fund with a portion of his personal wealth.
"My view is that the real estate market has bottomed out, valuations have settled and there are opportunities to be had. Two years ago the property market got overheated and, at that time, yields were only between 3 and 4% for prime real estate, with capital cost around 6%. However, today you can acquire good quality real estate at yields of between 7 and 8% per annum and the cost of capital is still circa 6%."
"This represents a near 30% shift in value and real estate is as attractive as it has been in a while. With the UK showing signs of grass roots recovery, I feel this is an ideal time to be entering the market," enthused Caan.
"The unique combination of my organisation's entrepreneurial flair, with ING's institutional track record and reputation, will provide potential investors with a hugely attractive investment opportunity.W
"We are looking to raise at least £60m of equity, and primarily expect to attract investments of somewhere between £0.2m to £1.5m from wealthy individuals."
The fund will be targeting making acquisitions of properties in the £15m - £30m valuation range.