A leading property consultancy and fund manager have joined forces to defy the economic climate with the launch of a multi-million property investment fund.
The Palmer GVA Property Fund LP is a joint venture between Palmer Capital Partners Limited and GVA Grimley and has raised £80 million from institutional and private investors which is set to rise to £160 million when fully invested.
Despite the tough economic conditions, the five-year closed end fund was over-subscribed and is the first fund of its type to be launched in the UK for months.
Alex Price, chief executive of Palmer Capital, said: “We are delighted to close this fund in such a challenging fund-raising environment. In March we predicted the bottom of the market for this type of stock, and since then the market has confirmed our judgment.
“This fund will aim to capitalise on the market cycle that should see property increase in value over the next five years from what will seem an historic low today.”
Rob Bould, chair of GVA’s Capital Markets Division, said the partnership between GVA and Palmer was an added attraction for investors in the fund.
Mr Bould said: “We are very pleased to have worked with Palmer Capital in the establishment of this new fund and notwithstanding the current low volume of transactions in the market we are already seeing interesting opportunities that will fulfil our buying criteria.
“We had been looking to increase the opportunities for our investor clients and we felt one way of doing it would be to join forces with an established fund manager and use our knowledge in local areas and experience in the real estate market.”
The investors in the fund include clients of ING Real Estate, Aviva Investors and Henderson Global Investors. It also includes £7 million of private investor money, of which £2 million has been invested personally by directors of Palmer Capital and GVA Grimley, an important fact in attracting investors according to Mr Bould.
He said: “The GVA and Palmer directors who have invested are experienced professionals who have given this fund their vote of confidence. Lots of investors want to know that the people managing a fund have personal gain or pain if the fund doesn’t perform as it should.”
The fund will be looking at investment opportunities ranging from £2.5 million up to £10 million, and will source its deals through a combination of the property companies in which Palmer Capital is invested as well as GVA Grimley and other agents.
One company that will be acting as the “eyes and ears” for the fund in the West Midlands alongside GVA will be Opus Land – the company behind Opus 9 in the Black Country and Warwick’s Opus 40 – in which Palmer Capital hold a minority stake.
Opus development director and joint owner, Gareth Williams, said: “Opus aims to work with the Fund to capitalise on the market cycle before values begin to rise with an active investment programme that will help stimulate the Midlands’ property market at a time when many banks are reluctant to finance speculative deals.
“Access to this new fund gives us the extra buying power we need to secure income producing assets.
“Our partnership with PCP enables us to unlock funding quickly and seamlessly – a relatively unique position in today’s market.”
Mr Bould, who said that the fund would be targeting retail, industrial and office schemes, said the Midlands offered significant opportunities for the fund.
He said: “Like all regional markets the West Midlands has suffered but a forward-thinking local authority such as in Birmingham which has been sending out very positive messages makes it an area that people will be keen to invest in.”