AXA is to launch the first UK-listed real estate investment trust investing in both UK and continental European property. The fund manager is aiming to raise up to £150m in equity, and said forecasted yield on the fund will be around 5% (after all costs) in the first year.
The fund will initially be invested in fixed income, then converted into real estate.
The new investment trust, sponsored by UBS, will target commercial investment properties worth up to £20-30m, predominately in the eurozone, with the initial asset allocation likely to be 70% in European property and 30% in UK property. AXA said it believed this diversification will enhance investor returns.