Kames Capital is launching a Property Income fund that targets a yield of 6%.
The vehicle, which is structured as a Property Authorised Investment Fund (Paif) and launches on 28 March, will hold bricks and mortar and aim to exploit gaps in valuation between prime and secondary properties.
It will focus on properties in the £2-10 million bracket and look to enhance yield through refurbishments, lease extensions and new lettings. The fund will hold up to 80% in direct property with the balance held in property shares, Reits, specialist property funds and cash.
Kames director of property investment David Wise says: ‘We believe the UK property market has finally turned the corner with property valuations benefiting from the recovery in the UK economy. However UK banks and other distressed property owners remain sellers meaning many buildings are still available at attractive prices.’