The £106m UK Pension Property Portfolio (UK PPP) fund is an ungeared investment first established for pension fund clients in February 2010. 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.
The existing fund is paying a dividend yield of in excess of 6.4% per annum and First Property expects to mimic this investment style and return profile for Fprop Sterling Income Fund.
Ben Habib, CIO of First Property Asset Management, acknowledged investors’ difficulty in securing sustainable high returns across most asset classes.
He said: “[the new fund] 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.”
Interest in commercial property has been revived by many wealth managers in recent months, and a wider review of the sector will feature in the forthcoming March edition of Portfolio Adviser.
