Seven Dials has launched a commercial property fund focusing on prime retail properties on British high streets.
The Lighthouse Prime High Street fund offers initial yields of between 6% and 6.5% and targets income of 5% annually after commissions. There is also the prospect of capital growth and total returns of 10% or more annually over the five-year life cycle of the fund, based on current yields.
The closed-ended fund invests in commercial properties valued between £1m and £7m in locations including Cambridge, Canterbury, Chester, and Nottingham.
Astrid Cruikshank, the manager of the new vehicle, says she believes the British commercial property market has reached a turning point as the volatility of the last 18 months has created attractively priced stock opportunities.
As Britain emerges from recession and consumer spending starts to rise again, retailers will experience a shortage of supply of prime sites, she says. Cruikshank also emphasises the high level of liquidity in the fund’s holdings, and the long-term stability provided by the properties’ long lease structures.