A UK property fund has beaten its money-raising target.

UK-based investment boutique Kames Capital has closed the Kames UK Active Value Property Fund after exceeding its fundraising target, raising £275 million ($415 million) from institutions, £25 million more than its original aim. The fund is a closed-ended vehicle.
 
Managed by Philip Bach, the Kames UK Active Value Property Fund targets secondary properties, particularly those in the bracket under £15 million. Kames says that such properties offer attractive returns such as by extension of leases, letting of vacant space and refurbishments.

The fund is structured as a Jersey Property Unit Trust and has a seven-year life, with the opportunity to extend for a further two years. The fund has a target internal rate of return of 10 per cent.

Two of the fund’s recent purchases include a retail building occupying a prominent position in the heart of Sheffield, which the fund purchased for £5.75 million at a net initial yield of 7.5 per cent. It is let to Sports Direct, Poundland and the British Heart Foundation, three retailers each with strong covenants. The other property, in Town Square in Basildon, Essex, comprises a four-storey building with retail premises on the ground floor and purpose-built offices on the upper floors. It was purchased for £9.83 million at a net initial yield of 9.0 per cent. It is let to 11 tenants with strong retail covenants and offers the active management potential to re-gear leases, while the long-term town plan for Basildon will greatly improve the town centre, the firm said.