Fabrix Capital has announced the launch and first close of Fabrix Investment Fund 2 (Fabrix i2), a closed-end fund focusing on value-add offices in fringe areas of Central London.
The company said it has raised £11 mln of equity to date, from a mixture of family offices and private investors, with the final fund expected to reach a gross asset value of £100 mln following subsequent raises.
Fabrix i2 has purchased its first asset, a former government body back office in the Southbank.
The launch of Fabrix i2 builds on the success of Fabrix Capital’s first vehicle, Fabrix i1, which has committed £47.5 mln of equity in its first 12 months of operation across eight assets with a forecast five-year IRR of 15.00%+. The first asset of the fund was sold at an IRR of 71%.
The fund will aim to deploy its capital within a three year investment period with a minimum target IRR of 8.00% over the vehicle’s seven-year term. It will have a target LTV of around 55%.
Clive Nichol, managing director of Fabrix Capital, said: 'We believe that there is significant demand for fringe London offices, given record high occupancy costs in the core London markets. This structural change is about tenants being more flexible on location, with building quality and work environment the major value drivers.'
He added: 'In the current economic climate, we believe the key drivers of performance will not be yield compression or rental growth. Fabrix i2 is a value-add strategy and the Fabrix team will deliver returns by buying well and delivering smart value add asset management initiatives to extract unrealised value.'
Fabrix Capital is a commercial property investment management platform founded in 2016 to create targeted investment strategies. The company has acquired 16 properties in its first 18 months of operation.