Puma Fund completes first deal

Shore Capital’s commercial property fund has made its first acquisition, paying £15m for a portfolio of five UK properties.

Puma Property Fund, the commercial property fund launched by Shore Capital earlier this year, has made its first investment, acquiring a portfolio of five buildings in the UK for just over £15m.

The portfolio comprises office, retail warehouse and industrial properties in England and has a projected initial yield of 7.44 per cent. In keeping with its strategy of leveraging its property acquisitions, Puma will borrow 80 per cent of the cost at a rate ‘substantially lower’ than the initial yield, generating a positive yield gap.

Shore Capital chairman Howard Shore said the acquisition would benefit from the low level of UK interest rates, which currently stand at four per cent. He said the fund would offer investors a vehicle capable of generating an “extremely competitive cash return, as well as offering the opportunity to boost the return on equity by taking advantage of prevailing very low interest rates. Net income will be distributed to investors semi-annually.”

To date Puma has raised approximately £24m which equates to a potential buying capacity of approximately £120m given Puma’s strategy of gearing acquisitions up to 80 per cent. The fund is expected to remain open to investors through the next quarter.

Puma Property has set up an investment committee which is chaired by Cyril Metliss, a director of British Land. Other committee members are Peter Sable, a South African private investor with experience in property, Peter Klimt, and Guy Naggar, who are CEO and chairman respectively of Dawnay, Day International, the property investor which will direct Puma’s investment strategy.