Kames Capital secures £3.2m property for UK Active Value Property fund

Kames Capital has completed the £3.2 million purchase of eight industrial units for its UK Active Value Property fund as it continues to find opportunities to add to its portfolio.*
The closed-ended £150m fund, which launched in October 2013 and is managed by Philip Bach, has already invested the vast majority of its assets from a series of fundraisings and is now targeting a year-end close at £300m after receiving further commitments from institutional investors for an additional £100m.
The latest deal has seen it purchase the industrial units in Leighton Buzzard, South Bedfordshire, an area that Kames believes has excellent prospects due to its proximity and links to the UK national road network.
Situated in an established area with a limited supply of available space and a long-term tenant contracted until at least August 2018, the purchase already offers an attractive net initial yield of 10.2%, which will increase to 12.4% in four years’ time.*
The property is seen as a perfect addition to the existing portfolio which includes sites such as a £5.5m Wickes DIY store in South Shields, Tyne and Wear.
Kames has been running its Active Value property strategy for nearly four years through the open-ended version of the fund, and has a track record of sourcing attractive stock in the secondary market, particularly in the £2-£10m price bracket.
By focusing on this area of the market, the fund is able to produce an attractive yield of between 8-10% per annum, substantially ahead of many offerings in the open and closed-ended space.*
The fund is expected to close to new investors at the end of this year, with a final fundraising poised to complete imminently.
Bach says: “This latest purchase further demonstrates our team’s ability to source good-quality secondary stock. The industrial units are in Leighton Buzzard, which benefits from good communications to the national road network, and are located in an established industrial area with limited supply of available space. They are let until 2023 to an organisation which stores and distributes charity and government aid in the UK and overseas.
“We launched with £115m of initial funding and have commitments of over £100m which means we are on target to reach £300m by the years’ end.”