Long-Term Investment Fund: Mainland UK Industrial & Logistics New Builds

November 9, 2020

A long-term investment fund which invests in Mainland UK based industrial and logistic new builds...

We have access to a long-term investment fund which invests in Mainland UK based industrial and logistic new builds subject to the strength of the tenant's covenant. This fund can deploy between £8 million to £25 million per project investment. The fund itself has the potential capital available of £500 million.

The investment strategy is “build and hold” income generating, focusing on sale & leaseback, single tenant net leased properties and a secondary focus on “build to suit” leasebacks with forward commitment to lease. The target lease term is 5+ years, with shorter terms considered subject to real estate quality and rent vs. ERV. The target overall WALT is 10+ years.

A smaller independent investment fund will deploy between £1.5 million and £6 million to purchase appropriate land suitable for the build-out of industrial or logistic properties. This fund enters into a joint venture with a developer, whereby the developer arranges suitable tenants for the new build properties. This joint venture arrangement is on a profit share basis whereby the investment fund charges a coupon of 7% and a project profit share of 25%.

The developer does not have to input any capital but benefits from 75% of the project profit.

The senior debt development funding is arranged independently to ensure that the industrial logistics are built out for the above long-term investment fund to own.

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