Mercia Asset Management PLC is raising a £500 million ($672 million) U.K. Real Estate Development Debt Fund focused on financing industrial and logistics projects.
The proposed fund will provide primarily first-charge secured development debt to experienced U.K. commercial property developers. The strategy is expected to allocate approximately 80 percent of capital to new development and 20 percent to refurbishment projects, with typical loan sizes ranging from £1 million ($1.3 million) to £30 million ($40.3 million).
The fund is targeting a net return of more than 10 percent annually after management fees and will have a five-year revolving investment period. Loans are expected to have an average duration of two years.
The strategy will focus on the U.K. mid-sized industrial and logistics market, particularly properties ranging from 20,000 square feet to 100,000 square feet. FDC said the segment continues to face structural undersupply driven in part by ecom
