F&C REIT Asset Management is seeking to invest in UK regional real estate on behalf of German institutions.
Best Value UK I, structured as a German Spezialfonds, would invest in commercial properties outside London for large German institutions.
F&C said institutions would need to make a minimum commitment of 鈧�5m for the fund, which has a target volume of 鈧�180m (including 鈧�100m of equity) and will use Hansainvest鈥檚 administrative platform.
F&C plans to invest in cities including Birmingham, Glasgow, Edinburgh and Manchester. A total of 10 to 15 office, retail and logistics properties would be bought for the fund, with medium-sized cities to the south west of London also a possibility.
Iris Sch枚berl, managing director of F&C REIT Germany, said: 鈥淩egional locations in the UK have a higher stability and offer higher yields compared to London.鈥�
Sch枚berl鈥檚 UK colleague, Guy Glover, added that markets outside London are 鈥渁t least 30% below the record prices in 2007鈥�, offering room for an improvement in value from future rent increases and expected yield compression.
The fund is targeting an annual average distribution yield of 5.75% over 10 years.
Last week, F&C REIT bought two retail parks in Germany for a commercial property portfolio it manages for an unnamed institutional investor. The properties in Wittingen near Wolfsburg, and Karben, near Frankfurt, were bought for 鈧�18m.
The company continues to buy real estate for its Best Value Germany II Spezialfonds, focusing on large and medium-sized German cities.
Sch枚berl added that the company has sufficient capital to 鈥渞ealise transactions quickly鈥� and aims to surpass last year鈥檚 transaction volume of 鈧�330m in Germany.
