News
22 January 2010
Cordea Savills Launches UK Income and Growth Fund
Cordea Savills, the international property fund manager, has launched the Cordea Savills UK Income and Growth Fund, a flagship, open ended UK commercial property fund. The core diversified fund intends to deliver distributions to investors in excess of 5% as well as capital growth over the longer term.
The Fund is managed by George Tindley, who has outperformed the UK market in 20 of the last 21 years¹ with his management of a discretionary FTSE 100 pension scheme.
The Fund, which has a target size of £1 billion, will invest in prime assets offering secure income streams across the main commercial sectors, including office, retail and industrial. For offices, the Fund is targeting London and the top six cities²; for retail it is focusing on retail warehousing in areas of undersupply and large catchments; and for industrial the key drivers are proximity to motorways, underlying land value and long occupational leases. The maximum leverage will be 30% loan to value of the gross asset value.
The Fund has already had its first close with three cornerstone investors, including Aviva Investors, as well as another leading global multi-manager and a European pension fund. The fund is now set to make a number of acquisitions.
Michael Flynn, Head of Institutional Business at Cordea Savills, commented:
“We are launching this fund in response to investor demand for a low-geared core fund with a transparent structure and no legacy issues. The fund, with its stable income bias, aims to deliver outperformance against the property market over the longer term whilst being risk-averse. George Tindley has an impressive track record in the UK property market and he has the right credentials to manage the UK Income and Growth Fund through all types of market conditions.”
George Tindley, Fund Director, commented:
“Despite uncertain prospects in the short term, we believe that UK prime commercial property is fairly priced and will perform well again once the occupational markets return to strength. The capital markets are maintaining their hunt for reliable income producing assets and this is encouraging domestic and international investors back into the UK property investment market boosted by the relative weakness of sterling. We believe the prime end of the market will be sustained by the weight of institutional and private money seeking higher returns secured against strong covenants. In the second half of 2010 we expect the supply of investment product will increase, providing more opportunities for investors but at the same time creating upward pressure on yields. In these circumstances, stock selection skills will be more important than ever to deliver performance”
The Fund will be an open-ended Jersey Property Unit Trust (JPUT) with a Luxembourg FCP Feeder fund.
¹Outperformance is versus an IPD index based on life and pension funds with capital values of between £100m and £750m, 1988 to 2008 inclusive
²Top six cities are Edinburgh, Glasgow, Leeds, Manchester, Birmingham and Bristol
Notes for editors
-
Cordea Savills is an international property fund manager with offices in London, Milan, Munich, Stockholm, Luxembourg, Paris and Singapore.
-
As at 30 September 2009, Cordea Savills managed £2.5 billion (€2.7 billion) of assets
-
Cordea Savills is the brand name for entities in the Cordea Savills group, including Cordea Savills LLP, Cordea Savills Investment Management Limited, Cordea Savills Advisors Srl, Cordea Savills SGR SpA, Cordea Savills GmbH and Cordea Savills Fund Managers S.à r.l.
-
Cordea Savills LLP is a limited liability partnership registered in England No: OC306423