Palmer Capital, the London-based private equity firm, and CBRE Global Investment Partners (GIP), the subsidiary of real estate investment management firm CBRE Global Investors, have launched new vehicle which is targeting equity of £225 million ($291 million; €265 million).
The Palmer Capital Development Fund (PCDF) IV, the two firms said, will target UK real estate where there is the opportunity to add value through refurbishment, redevelopment, repositioning and active asset management. PCDF will have a four-year duration, with a two-year investment window, and will target a 15 percent IRR.
The new fund, which is the largest to date, is the latest in the joint venture’s value add series and follows the partnership’s third offering, which garnered £175 million between 2014 and 2016.
“We believe that uncertainties in the property market and a flight to prime assets will create buying opportunities for value-add investors, which we are well positioned to exploit,” said Chris Button, head of value add real estate investment management at Palmer Capital.
“The success of the previous funds in the PCDF series made it an easy decision to launch a fourth fund. The partnership between CBRE GIP and Palmer Capital works very well and this is illustrated by the strong returns being achieved for our clients,” said Alex Bignell, head of UK at CBRE GIP.
The joint venture has already secured its first three purchases on behalf of the fund, committing around £25 million of equity in the process. This includes acquiring land, earmarked for residential and retail developments, in Ayr, Scotland; a business park in Thame, near Oxford; and residential land in North Yorkshire.