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Yearsley warns timing may be wrong for launch of shopping centre fund

The potential of a property fund that invests in shopping centres is being questioned by a leading investment specialist.

Hargreaves Lansdown investment manager Ben Yearsley says he has doubts about the timing of the launch of the 200m Lathe M Redleaf VI shopping centre fund.

He questions whether it is the right time to invest in shopping centres when there is a danger of interest rates rising and causing consumer spending to fall.

The fund started with the acquisition of Castlegate Shopping Centre in Stockton-on-Tees for 45.1m, reflecting a net yield of 6 per cent.

The target size of the fund is 200m and the aim is to acquire shopping centres priced between 30m and 70m.

Lathe has also set up an exempt property unit trust to enable investment through self-invested personal pensions and small self-administered schemes.

The firm is a specialist property fund manager and launched its first fund in 1998, which launched with around 25m in assets. At the end of its life in 2003, the fund had returned 25 per cent a year.

Lathe managing director Ian Knight says: “With Redleaf VI, we are moving up a big step. Up to now, we have concentrated on acquiring smaller regional shopping centres but with this fund we have set our sights on major town centre lots.”

Yearsley says: “Is it the right time to do that, with interest rates potentially about to rise and with consumer spending likely to drop?”

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