First Closing of EHI Fund

RNS Number:5259Y
Property Fund Management plc
11 May 2004






FOR IMMEDIATE RELEASE

11th May 2004


PFM ANNOUNCES FIRST CLOSING FOR MAJOR EUROPEAN PROPERTY FUND



Property Fund Management PLC ("PFM") today announces the first closing of a
substantial new European industrial property fund that has attracted a group of
leading UK and European investors who have committed a total of Euro193m of equity
including Euro7.5m from PFM as co-investor.


Initial investors in the fund, known as the Euroind High Income Fund ("EHI
Fund"), include Stichting Pensioenfonds ABP of the Netherlands, the Swedish
pension fund Alecta Pensionsforsakring, omsesidigt, Insight Investment (on
behalf of Clerical Medical) and Tamweelview SA - a major investor in European
private equity real estate funds.


Established as a Dutch Limited Partnership, EHI Fund is subject to formal Dutch
Revenue clearance, which PFM anticipates receiving shortly.


It is intended that the EHI Fund will have total equity of Euro300m with purchasing
power amounting to Euro700m. PFM aims to secure the remaining equity within the
next six months.


The EHI Fund, which is forecasting between 9 - 10% income distribution yield in
the second year, benefits from low operating structure costs with an emphasis on
performance related fees.

                                    
Already Euro245m of property acquisitions for the EHI Fund are in an advanced stage
of negotiation through PFM's wholly owned subsidiary iOG. This initial pipeline
of acquisitions comprises 40 separate industrial estates accounting for 670
individual letting units. These estates are being acquired from 19 different
vendors and the blended net initial yield is 8.7% after purchase costs, with the
benefit of circa 16% void rate - to be the subject of refurbishment initiatives
to assist leasing programmes.


The portfolio under offer for the EHI Fund and PFM's existing fund, EIP, will
take gross funds under management in Europe to Euro830m, rising to approximately
Euro1.3bn when the investment programmes are completed.


The above European profile, combined with the recent expansion initiative in the
UK, the Industrial Investment Partnership, will provide PFM with contracted
capacity to acquire and manage circa #1.55bn of property on medium term
contracts.





Ends.


For Further Information contact:

Property Fund Management Plc.                                Tel: [phone]

            John Sims, Chief Executive

            Richard Croft, European Director

            Andrew Yates, Finance Director

Baron Phillips Associates.                                   Tel: [phone]

            Baron Phillips










                      This information is provided by RNS
            The company news service from the London Stock Exchange

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