Ashtenne Launches Industrial Fund

LONDON-Specialist industrial investor Ashtenne Holdings is to launch a £360 million ($507 million) limited partnership backed by Morley Fund Management.

The fund has been developed to allow institutions to gain exposure to the high yielding UK industrial property, an area where many funds are underweight because of the requirement for active management. To kickstart the venture, Ashtenne will contribute £60 ($85 million) million in return for a 33% stake, and Morley £120 ($170 million) million in return for a 67% partnership share.

The fund will then buy £249 million ($350 million) of industrial properties from Ashtenne; £16 million ($22.5 million) of industrials from Morley and another £16 million ($22.5 million) worth are being bought in the market.

The fund will have a seven-year lifespan, with the potential to extend this further. Under the partnership agreement, the fund can raise debt up to a 50% gearing, and a £180 million ($254 million) debt facility is already in place with a consortium of four banks led by NatWest.

David Wise, Property Investment Director of Morley said: ‘We wanted to create a focused vehicle to access the attractive returns available from high yielding industrial property when managed by specialists. We are confident that when Ashtenne’s proven expertise in extracting high returns from this product is combined with the reputation and financial strength of Morley it will be possible to grow the fund significantly.’