Tag: NSS V

Newcore completes £30m covered land play with East London acquisition

Newcore completes £30m covered land play with East London acquisition
  • Social infrastructure specialist Newcore Capital has acquired an existing supermarket investment in Bromley-by-Bow, East London, for £30m from British Land;
  • The property comprises a 70,000 sq ft Tesco supermarket, a 558-space car park over 5.6 acres, and a petrol filling station – with approximately 20% site cover;
  • Made on behalf of Newcore’s latest value-add fund, Newcore Strategic Situations V.

Newcore Capital, the UK social infrastructure real estate specialist, has acquired a 5.6-acre supermarket investment in Bromley-by-Bow, East London, from British Land for £30m.

The site, which sits within the London Borough of Tower Hamlets, currently comprises a 70,000 sq ft Tesco supermarket, a 558-space car park, and a petrol filling station.

Morgan Williams and Osborne Clarke acted for British Land on the transaction. Savills and DWF acted for Newcore.

The asset was purchased on behalf of Newcore’s latest value-add vehicle, Newcore Strategic Situations (NSS V), as there is medium term scope to unlock value from the site due to its strategic location in a key regeneration area in East London, while benefitting in the shorter term from the income generated by the existing occupier.

NSS V reached a final close at £190m of equity commitments in May last year and is still in the investment phase. Recent acquisitions include an NHS-backed GP surgery in Kent, two education investments in Oxford and Cambridge, and a food distribution centre in Colchester.

Harry Savory, CIO, Newcore Capital, said: “We are pleased to have purchased the Tesco Bromley-by-Bow and we are actively on the hunt for further covered land plays in strategic locations where there is a medium-term opportunity to enhance value through increased provision of social infrastructure uses – this is a key criteria  for us, alongside the potential for strong risk-adjusted returns”.

In late 2023, Newcore announced the launch of a new core-plus investment vehicle, named The Newcore Social Infrastructure Income Fund, which is targeting £375m in equity commitments. The vehicle – the firm’s largest fund yet – aims to capitalise the strong underlying demand fundamentals for social infrastructure real estate at a time of market dislocation, while its size is indicative of Newcore’s belief in the positive investment outlook for the sector.

Hugo Llewelyn, CEO, Newcore Capital, said: “With the deflationary impact of the internet continuing to disrupt offices and retail, previously the mainstay of institutional investment in real estate, investors are increasingly looking for exposure to asset classes that demonstrate resilience to technological change. We see the broad spectrum of social infrastructure as presenting one route for institutional capital seeking sustainable income and capital value growth and the ability to deliver tangible positive impact.”

Newcore Capital announces £190 million final close for fifth UK social infrastructure real estate fund

Newcore Capital announces £190 million final close for fifth UK social infrastructure real estate fund

Newcore Capital achieves the investment manager’s largest-ever capital raise amid challenging macro-economic circumstances

Limited Partners in Newcore Strategic Situations V include Merseyside and Clwyd Local Government Pension Schemes alongside fund of fund, insurance and corporate pension schemes, family offices and high-net-worth individuals 

NSS V will invest in UK social infrastructure assets, including education, healthcare, storage, life sciences, waste management and transport

LONDON, 24 MAY – Newcore Capital (‘Newcore’) has secured £190 million in equity commitments for Newcore Strategic Situations V (NSS V), which will invest in physical social infrastructure across the UK with a principal focus on Greater London and the South-East of England.

Combined with appropriate leverage, the capital raise gives Newcore close to £350 million of firepower to deploy into the current dislocated market. 

Notable investors include the Merseyside and Clwyd Local Government Pension Schemes, two European fund-of-fund managers and a FTSE-100 corporate pension fund. A number of high-net-worth individuals and family offices also participated in the final close. The fund had a 60 percent re-up rate, with those re-upping increasing their average commitment by 74 percent. Accord Europe Limited and its affiliates were the appointed placement agent. 

NSS V, a close-ended vehicle with a life spanning over seven years, is the latest in Newcore’s flagship value-add fund series. The UK-focused investment manager also manages core/core-plus separate accounts on behalf of two private family offices. 

The fund’s target net levered internal rate of return (IRR) is 13-15 percent per annum (p.a.) with sustainable leverage up to 30 percent loan-to-value at a fund level. Newcore has achieved a 14 percent-plus p.a. aggregate IRR since its inception in 2011 with modest financial leverage.  

Newcore currently manages £500 million in assets across both its core-plus and value-add strategies. The investment manager focuses exclusively on real estate that enables the provision of essential services to communities. Target asset classes include education and childcare, healthcare, storage, life sciences, waste management, roadside and transport. 

As the UK’s first dedicated real estate investment manager to achieve B Corporation status, Newcore has a strong focus on ESG (Environmental, Social, and Governance). Newcore donates at least 10% of its profits to its Newcore Foundation and has contributed close to £500,000 to charitable causes since its establishment in 2011. 

Newcore Capital CEO Hugo Llewelyn commented: “To have achieved our largest final close to date against a deeply uncertain economic backdrop is a testament to the track record of our team and the quality of our proposition, which is why so many of our investors have invested with us throughout our value-add fund series.

“Across traditional real estate sectors, rising interest rates are colliding with structural changes that put many assets at risk of obsolescence, forcing investors to rethink their allocations and we expect social infrastructure to form a greater portion of institutional portfolios going forward.”

Neil Sarkhel, chief operating officer at Newcore Capital, added: “Our strategy allows institutional investors to gain exposure to hard-to-access, granular assets that are both resilient and genuinely impactful. The capital raised will enable the creation and refurbishment of space for essential social uses.”

“Our investment approach with Newcore Strategic Situations V will look to build on the success of previous funds while intensifying our occupier engagement to drive positive ESG outcomes.”

Peter Wallach, director of pensions at Merseyside Pension Fund said: “Our continued investments with Newcore Capital allow us to contribute to the provision of essential infrastructure and services the UK needs to support a growing and ageing population, while also contributing to the ‘greening’ of the built environment through sustainability-focused, value-add asset management initiatives.”

Early investors in the fund include a number of high-net-worth individuals introduced by Coutts, via its investment club. The Coutts Investment Club connects some of the bank’s most financially sophisticated, high net worth clients with private investment opportunities, both direct private companies but also thematic private equity and real estate funds.

Hans Prottey, Head of Private Markets at Coutts said: “We are pleased to support Newcore’s fundraise, particularly given both Coutts and Newcore are certified B Corps. 

Our clients saw this as an attractive opportunity to invest alongside a highly specialised, award-winning fund manager with a proven track record. We look forward to following Newcore’s achievements over the next few years.”