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First Property raises funds to gain from post-Brexit property weakness

[LONDON] First Property Group Plc has launched a fund to invest in office blocks and business parks across England, as it hopes to buy projects that have been hit by a slowdown in the British commercial property market.

First Property said the fund, which has a term of seven years, had closed its first round of funding on Friday and raised £182 million (S$326.4 million) from eight institutional investors.

The fund includes a commitment of £3 million by First Property and a second closing with additional money raised is expected later this year, said the AIM-listed property fund manager that also has operations in Poland and Romania.

Uncertainty about the value of British property and its future growth has grown as financial services firms, large occupiers of London offices, draw up plans to move some jobs out of Britain since the vote to leave the European Union.

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The fall in the value of the sterling has also made domestic property cheaper for overseas investors.

A survey by Deloitte Real Estate showed in May that the amount of empty office space in London has jumped over the past 15 months and is likely to rise again despite the potential for a post-Brexit business exodus that could drive down rental values.

"The UK's decision to leave the EU has created opportunities on which we, as a niche fund manager, are well placed to capitalise," Chief Executive Ben Habib said.