Savills IM secures AUB investment for Prime London Residential Development Fund II

By Bridging Loan Directory 2nd February 2016

Clients of Ahli United Bank (AUB) have invested over GBP20m equity in Savills Investment Management’s (Savills IM) Prime London Residential Development Fund II via a bespoke Guernsey Investment vehicle.

This takes the total equity raised for the Fund to over £80m for investment in greater London residential development opportunities. Savills IM anticipate exceeding the Fund’s £100m equity target.

To date, the Fund has invested c. £50m in developments in Croydon, Woolwich, Golders Green and Earlsfield, with a gross development value in excess of circa £200 million.

Its predecessor, the Prime London Residential Development Fund I (“PLRDF I”) was launched in 2012 and raised £100m equity for investment in Prime Central London residential development opportunities. PLRDF I invested in five projects with a gross development value in excess of £300 million.

Patrick Carr, Fund Director, said:

“We’re delighted to secure AUB’s investment in PLRDF II. The rationale for investing in greater London residential development remains compelling, with an acute supply demand imbalance, particularly at the lower value end of the market where PLRDFII is focused. We now have a development pipeline in excess of £500 million across the two funds, and are expecting further investment in PLRDF II over the coming months.”

Prakash Mohan, Group Head, AUB, said:

“We are pleased to be working with Savills IM, and to have a dedicated investment vehicle by which our clients can gain exposure to the greater London residential development market with its strong demographic profile. This is part of our efforts to offer our clients a range of strategies and fresh opportunities with attractive risk and tax adjusted returns, managed on a prudent basis”.

PLRDFII aims to deliver an IRR of 15-18 per cent by identifying mid-market development opportunities (circa £500-£1250 per sq ft) in London where the supply/demand imbalance is most acute. By leveraging its site identification expertise and relationships with leading developers, the Fund team targets opportunities that will benefit from strong domestic demand in emerging hubs that are expected to benefit from outperformance through regeneration initiatives, gentrification and infrastructure improvements.