Rockspring raises £70m for UK core-plus fund

The London-based firm sees ‘opportunities all over the UK in all sectors’ as it targets £300 million for a final close later this year

Rockspring Property Investment Managers has held a first close of £70 million (€86 million; $117 million) on its UK core-plus fund. So far, investors have come from Europe and Australia, wanting to gain exposure to Rockspring’s strategy of core-plus opportunities across the UK and a target IRR of 12.5 percent. The London-based firm is targeting £300 million overall for Rockspring UK Value 2 and expects a second close at the end of June before wrapping up the fund in late 2014.

The seven-year fund is a follow-on to Rockspring’s first UK Value Fund, which it launched in 2009 and which closed in June 2010 on £336 million from 12 investors in four countries. The earliest deals for that fund included The Mall shopping center in Aberdeen, 65 Southwark Street in London and Exchange House in Milton Keynes.

Richard Bains, partner for fund management at Rockspring, said the firm was seeing “significant demand” for core-plus real estate investment strategies in the UK. Robert Gilchrist, chief executive, added that the fundraising so far supported the firm’s “confidence” in the broad recovery of the UK property market.

“We believe that this is a sustainable recovery that goes beyond yield compression and is based on favorable occupational dynamics,” said Gilchrist. “This should enable us to generate strong rental growth from high-quality assets.”

Rockspring revealed details of its UK fundraising progress shortly after taking part in PERE’s UK Roundtable in London. At the event, Bains said: “We have an improving economy, so turning (these) assets round is a whole lot easier now than it has been over the past five years. Core-plus values have come in massively over the past six to nine months, so we will not be able to make money for UK Value II just out of yield compression. It will be all about the value we can create and, in an improving economy and occupational market, you have to back yourself to do that. There are opportunities all over the UK in all sectors.”

See next month’s issue of PERE for the full interview.