LGIM Real Assets has converted the life of its Industrial Property Investment Fund (IPIF) from a closed-end, fixed life vehicle to an evergreen open-ended fund. The restructure allows the fund to take a longer term approach to its assets and debt strategy as the industrial sector continues to offer strong growth prospects and out-performance.
IPIF was the best-performing unlisted property fund over one, three and five years, according to the AREF/MSCI (IPD) UK Quarterly Property Fund Index 2017. The fund, which specialises in multi-let industrial and trade assets in the South East, delivered a return of 25.4%, against the all funds annual return of 9.7%.
„IPIF has outperformed every year since its launch 20 years ago and we were delighted with the investor support to extend this vehicle. Our focus with IPIF has always been on strong quality income, rental growth, and opportunities to add value to our assets. This extension will allow us to reposition our assets and use our team’s asset management skills to continue to add value and grow the Fund over the long-term,“ said Jonathan Holland, Senior Fund Manager of IPIF at LGIM Real Assets.
The industrial sector outperformed significantly over 2017 with rental growth of 4.9% compared to All Property’s 1.9%. LGIM Real Assets remains convictional on the fundamentals for this sector: the structural shift to online; an expanding trade sector and a buoyant SME sector supported by lending at attractive rates. Furthermore, pressure on land from residential uses and limited development of multi-let estates will support pricing.
Launched in 1997, IPIF was one of the first indirect specialist real estate funds and has become a leader in its sector, having outperformed its benchmark, the IPD Quarterly Industrial Benchmark, over three, five, 10, 15 and now 20 years. The fund aims to acquire well located, good quality multi-let assets primarily in London and the South East.