Kames Capital is considering launching a property fund for retail investors following increased interest and new opportunities in property outside the safe haven of London.
Kames Capital chief investment officer Stephen Jones says that although the asset manager is not currently represented in property within the retail part of the market, it is seeing growing demand for property exposure through its institutional funds.
A general increase in interest surrounding property, along with a range of new opportunities, is now prompting Kames to consider a retail product in property.
He says: “Our take on property as a group is there is a marked uptick in interest. We have thought quite carefully about retail accessible product development in property and you can expect to hear more from us on this in the future.
“If you can secure a sensible asset with a decent covenant around it then yields and potential returns going forwards look pretty attractive to us.”
The main driver behind Kames’ consideration of a retail product is the emergence of new opportunities within second tier property as the UK property market recovers.
He says: “There is a move away from the very expensive safe haven assets of central London and there is beginning to be some value in sensibly stock picked and assessed second tier, second city properties around the UK.
“Our own expertise within the property team at Kames is very much focused on pursuing these opportunities currently.”
Jones gives the example of what he describes as “active value opportunities”. He says: “These are properties that perhaps have come out of bank balance sheets, that have been warehoused elsewhere for a while.
“They are now being more actively managed and producing a good income and potential for capital uplift in the years to come within a rehabilitated property market context.”
Jones adds that chasing these opportunities requires careful navigation as some second tier property is actually third tier that would otherwise be knocked down.