Bridges closes fifth property fund at £350m hard cap as investors seek out sustainable real estate

9th June 2022

We’re delighted to announce the final closing of our fifth real estate fund, Bridges Property Alternatives Fund V (“Fund V”), at its hard cap of £350m – £50m above our original target and the largest fund Bridges has raised to date. Fund V is almost 60% larger than its predecessor vehicle; the re-up rate from […]

We’re delighted to announce the final closing of our fifth real estate fund, Bridges Property Alternatives Fund V (“Fund V”), at its hard cap of £350m – £50m above our original target and the largest fund Bridges has raised to date.

Fund V is almost 60% larger than its predecessor vehicle; the re-up rate from existing investors was over 80%, while almost half of total commitments came from new LPs – many of whom were specifically attracted by the fund’s dual focus on on financial and sustainability performance.

The Bridges Property Funds have invested and committed to more than 25 transactions over the last two years, making it one of the most active property investors in the UK. Recent investments include:

  • Lower-cost homes: Latitude is a residential development of over 900 lower-cost and affordable housing units near Leeds city centre, which is projected to deliver returns in excess of 30% IRR
  • Low-carbon logistics: Verda Park, a 154k sq. ft. ‘net zero’ industrial development in Wallingford, Oxfordshire, which is already over 70% pre-let
  • Healthcare accommodation: Birchgrove, a pioneering ‘assisted living for rent’ platform that is currently building out 7 sites in the UK, the first two of which have been sold to global asset manager M&G in a deal worth £69m

Fund V is already over 50% invested or committed – including Bridges’ first real estate deal outside the UK, in Dublin – underlining the strength of our pipeline. 20% of the fund’s current investments have either been pre-sold or forward-funded.

With Fund V, we aim to continue our track record of delivering strong investor returns – with average realised gross returns in excess of 25% IRR over the past 12 years – alongside positive outcomes for people and the planet. Across our previous and current investments, Bridges’ property funds are on course to deliver:

  • Over 5.5m sq. ft. of low carbon industrial space, including some of the most sustainable logistics buildings in the country – with multiple EPC A+/BREEAM Excellent buildings
  • Over 3,000 affordable and lower cost homes, with a combined market value of about £1bn
  • Over 1,300 assisted living and care home beds, including some of the most environmentally friendly care homes in the country
  • Almost 100,000 tonnes of carbon emissions savings, equivalent to planting about 10 million trees

Fund V is also one of only a few real estate funds to be classified as an Article 9 (or “Dark Green”) Fund under the Sustainable Finance Disclosure Regulation – reserved for managers of assets that are sustainable from the point of acquisition. This is only possible because we are often involved from the start of the development and planning process, allowing sustainability features to be incorporated into the building design.

Simon Ringer, Head of Bridges Property Funds, said:

“We are delighted to announce this very strong level of investor support for our fifth property fund. Across our platform, we have now completed over 80 transactions, investing both directly and with our highly experienced joint venture partners. We are already ahead of our deployment targets for Fund V having secured 17 transactions, many of which have been completed off market.

By concentrating on our preferred alternative and needs-driven sectors such as low-carbon logistics, healthcare and lower-cost housing, we have been able to generate consistent financial returns – typically well ahead of market benchmarks – whilst also achieving meaningful social and environmental impact. We have always believed that renewing our built environment is a critical part of the transition to a more sustainable and inclusive economy. The support for Fund V is testament to the importance real estate investors are now placing on sustainability and impact factors.”

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