The Barwood Property Fund 2017 is a closed-ended, five-year fund focusing on commercial property.

The potential size of the fund is expected to reach £150m from prime regional markets outside London.

The fund will focus on lot sizes between £3m and £20m in urban logistics and distribution warehouses.

Barwood has found that these properties were in high demand due to internet retailing.

Investors are expected to receive IRRs (internal rates of returns) of 15% per annum net of all fees over the five-year-period, with a maximum 50% LTV gearing and a minimum £1m subscription.

This is the fourth fund to be launched by Barwood Capital since 2009.

•   £70m of commercial property sold at auction
•   Prime commercial rental values on the rise despite Brexit uncertainty
•   Commercial lender rolls out £90m fund

Its previous 2015 growth fund raised more than £100m in commercial and residential property assets.

Joanna Greenslade, managing director of Barwood Capital, said: “During the last few months, the regional property market has seen a reduction in property values for secondary stock and a focus on quality and income.

“This has had the effect of reducing prices and competition for the underperforming assets that the fund will target for acquisition, yet maintaining the values in the prime market targeted for disposals.

“This increasing yield gap between primary and secondary assets currently stands at almost 3.5%.

“Investors are increasingly seeing this opportunity and to date we have received investor commitments for 25% of our new fund.”