British Land eyes buy-to-let fund

The UK REIT is working with property services firm King Sturge and Charles Russell (CR) Property Advisers to launch the vehicle. The partners say a long-term shortage of properties thanks to the credit crisis and lack of liquidity for borrowers could fuel rental demand.

British Land, a public UK property company, has teamed up with two partners to raise a buy-to-let residential property fund.

The company, which will manage the assembled assets, is seeking up to £300 million (€336 million; $488 million) of equity, with an initial close of £50 million slated.

British Land is working with UK property services firm King Sturge and Charles Russell (CR) Property Advisers.

First close is expected at the end of May.

King Sturge is marketing to institutional investors. CR Property Advisers is marketing to other third party investors such as family offices.

Richard Crosthwaite, director of property acquisition and management at Charles Russell, told the Financial Times liquidation of asset in 2017 could be a possibility if the fund had reached the maximum amount of equity permitted in the fund.

He said: “It is not a seven-year fund, but it will have a seven-year lifespan, when we hit our target of 100 per cent return to investors.”

He added there were a number of reasons for launching the fund. He said in the long-term there could be a shortage of properties and lack of liquidity for borrowers, both of which would fuel rental demand.