F&C REIT’s new open-ended income fund has grown to £53m of assets. F&C UK Property Fund was launched in June 2010 to take advantage of opportunities to buy in prevailing market conditions, often off-market and sometimes from sellers under pressure from banks.
The fund controls inflows to match property it hopes to buy and has £7m in cash. Fund manager Guy Glover said he had hoped to reach £65m by the end of 2011, but although the market had been slow, he was still seeing stock coming through. F&C REIT hopes to double the portfolio by the end of the year.
Glover and co-manager Julian Smith recently added three properties to make nine in total, paying £15m for two offices on Bristol Business Park, a distribution building in Coventry and a shop in Chelmsford. The portfolio yields 6.5% and the fund has been delivering a distribution yield of slightly below 4% to its mix of retail and institutional investors.
“This was the first open-ended fund launched after all the liquidity problems in the open-ended funds market (in 2009),” Glover said. “We want to protect the income return for the existing investors, with whom we are in regular touch and we don’t want hot money flowing in and out.”