London-based Henderson Global Investors is launching an Industrial Income Fund.

The fund, a partnership between the firm’s £12.5 billion property business and Centurion Properties, hopes to raises £100 million (about $150 million) from investors with a target first close before autumn 2013.

The strategy will be focused on multi-let industrial assets that offer diversified short- to medium-term income streams in locations with sustainable tenant demand and underlying land value. It will target a net distribution yield of 6.5 per cent per annum and an internal rate of return of 8.5 per cent on invested capital over the five-year life of the fund.

The fund will target institutional investors with a bias towards the private wealth and family office space, a group which the firm believes is increasingly turning towards real estate investment opportunities owing to its strong income characteristics.

“The industrial sector of the UK property market has typically attracted investors looking for sustainable income. The events of the last few years mean that many of the players that usually dominate the sector are hamstrung by a combination of legacy issues and the scarcity of bank debt. In short, there are very few viable buyers,” Andy Schofield, director of research at Henderson Property, said in a statement.

“This has created an opportunity to take advantage of a sector where the paucity of buyers has resulted in a historically large disconnect between prime yields and those offered by good-quality secondary assets. Our recent experience demonstrates that this disconnect in value is overplayed and that compelling risk-adjusted returns, driven predominantly by sustainable income, are likely to make UK industrials the most attractive UK property sector over the next seven years.”