L1 Capital Launch Limited-Offer UK Property Fund
The UK property team of L1 Capital led by Mr Kee Gan has launched a limited offer UK residential property fund (L1 Capital UK Residential Property Fund 2).
This unlisted managed fund is seeking to raise $150m, with the funds raised to be used to purchase bulk residential apartments in major UK cities other than London.
The strategy focuses on Tier 1 UK cities with good transport links and infrastructure, where properties attract high, stable rental yields. Unlike London or the Australian capital city property market, UK property prices in these cities have remained stagnant for the last decade. However rental yields are 7-7.5% against a backdrop of low interest rates.
The return profile of the fund seeks to capitalize on strong rental yields with the possibly of capital growth if property prices can to move back to historical growth rates of 6% per annum.
The size of the new fund is reflective of the targeted investment size of the properties themselves, where there is limited competition from individuals and they are too small for institutional interest. L1 Capital successfully deployed $65m in this strategy with the L1 Capital UK Residential Property Fund no 1.
- What is the unique opportunity in the UK residential property market at the moment?
- Why is residential property outside of London the target market?
- What is the outlook for the UK economy?
- What sort of properties do you buy?
- What is the targeted return and how will this be achieved?
- What is this new offer for investors?
Tim McGowen is the co-founder of informedinvestor.com.au. He was previously the founder of Fortitude Capital the Hedge fund of the Year in 2008 & 2009. More recently he was a global Portfolio Manager for PM Capital.