Investment manager, AEW UK, closed its £100m South East Office Fund today, following a £30m investment from an unnamed local authority and £70m from Aviva Investors REMM.
At the end of December, the fund had invested 80% of its existing capital, acquiring five assets including Globe House in Marlow, Berkshire, Knyvett House in Staines, Middlesex and Geoffrey House in Maidenhead, also in Berkshire.
The fund seeks value-added opportunities on the M25, M1, M3 and M4 corridors and the Thames Valley, but excludes central London. It looks to return between 12% and 20% to investors per year.
Portfolio manager, Nick Winsley, said: “There is a pricing disparity between properties with long-term and short-term leases in these areas creating this window of opportunity.”
The asset manager claims that it is seeing growing occupational demand in the technology and pharmaceutical sectors and expects Crossrail to open up the M4 corridor in 2019.
Richard Tanner, head of investment strategy, added: “There is a strong correlation between demand for office space and the performance of the UK economy and, with the latter in a cautious recovery, business confidence has picked up. This is creating an improved outlook for underlying occupier demand.”
AEW UK, together with AEW Capital Management in the United States and Asia, AEW Europe and its regulated subsidiaries have more than €36bn in assets under management, of which €18.2bn is in Europe.