Primevest Capital Partners, the Netherlands-based company focused on urban living, connectivity and mobility, is hitting the fundraising trail with two investment vehicles that could attract firepower sufficient for a total of €1.6 bn of fresh acquisitions.
The company, which is present at Mipim 2022 this week where it is briefing potential partners and investors, has launched Communications Infrastructure Fund II with a target equity raise of €400 mln-€500 mln.
With leverage, this fund could amass up to €1 bn of mainly glass fibre optic cable assets, with also the possibility of add-ons such as mobile phone tower masts and data centres.
GLASS FIBER OPTIC NETWORK
In an interview with PropertyEU, the company said it had a pipeline of €500 mln already for the closed-ended vehicle, which is structured with a five-year investment period and a 10-year lifespan but with flexibility to be extended if necessary. It is offering net returns of 7-9%.
The pre-eminent focus is to roll out glass fibre optic broadband cable networks to be leased to operators such as the likes of Vodafone in target markets of Germany, the Netherlands, Belgium and Austria.
Primevest is no stranger to the niche real assets strategy. Prior to a management buyout in 2018, the company successfully raised and deployed its debut communications infrastructure fund having established the platform in 2014 when the firm was operating as Bouwfonds.
Primevest sees a huge opportunity for growth given many parts of Europe - including Germany - are lagging advanced economies in other regions such as Asia when it comes to the home and business penetration of fiber broadband networks. Covid-19 has only highlighted the need for better broadband infrastructure as millions struggled to work from home with poor connectivity and insufficient bandwidth.
The strategy differs to those of other real estate and real asset investors as Primevest invests in the “passive layer”. It acquires the fiber then employs contractors to lay it underground once it has gained permissions from the appropriate regulators before renting out the network for operators to overlay their technology and connect customers.
CAR PARKING FUND
In a matter of months, Primevest will also launch its next generation carparking fund, seeking €300 mln equity.
The company already has three funds and a mandate under its belt since entering into the carpark real estate business in 2005.
The new fund already possesses around €600 mln of acquisitions in the pipeline in target markets of Germany, the Netherlands, Spain, Italy, France and to a lesser extent, the UK.
Investors could gain distribution yields of 5% and an ultimate IRR of 6-7%. Such an asset class is ideally suited to Germany insurance companies, pensions funds and also banks given its secure income characteristics from leases to operators.
But in an evolution from previous funds, there will be room not only to acquire fully established carparking assets but to engineer assets to provide add on services and components such as last mile logistics hubs and Dark Kitchens, and therefore attract two or three operating tenants at one site.
Said Frank Noé, head of capital formation who joined the firm in December: ‘We really see the trends among the operators to develop parking away from real estate and more into infrastructure by adding various services.’
Q2 LAUNCH
This fund, which will be launched likely in Q2, has an open-ended fund architecture with a four-year investment period and a 10-year initial lifespan that can be extended.
Deals are already under negotiation in Germany, the Netherlands and Spain.
As well as carparking and communications infrastructure, Primevest manages residential assets as the third pillar of its business. Deals continue to be struck in countries such as Germany and Spain.
In addition, the company took over Holland Immo Group based in Eindhoven in November 2021, adding a total of around €3bn of assets.
HOLLAND IMMO SYNERGIES
That firm is busy in carparking, residential and healthcare sectors. Under Primevest control, synergies could see new funds launched in the healthcare space for institutional investors. There might also be a chance for Holland Immo to offer its private client investors exposure to Primevest’s communications infrastructure assets.
Last year, the company expanded its leadership when Patrizia professionals, Peter Helfrich and Gaston Hupkens, joined as MD and head of operations respectively.
FOR A FULL INTERVIEW AND DISSECTION OF PRIMEVEST’S REAL ASSETS STRATEGIES SEE THE APRIL 2022 EDITION OF PROPERTYEU.
