BNP Paribas Real Estate has raised €320m for a pan-European real estate fund.

The firm’s Investment Management business said its Next Estate Income Fund II was backed by Italian and French investors.

Pension funds and insurance companies in France, Italy, Luxembourg, Spain and Ireland, backed the fund, which now has an investment capacity of more than €500m.

The Luxembourg-based fund will be invested in grade-A properties in key euro-zone office cities.

Laurent Boissin, fund adviser, said: “The fund is seeking high quality assets in recognised office markets of the euro-zone to deliver a robust income with low volatility.

“We are currently looking at the major German cities as well as the Paris region, Luxembourg, Brussels, Amsterdam, Madrid and Milan.”

Final closing of the fund is expected in the second quarter of next year, with equity commitments expected to take the fund’s targeted investment capacity to €800m.

The fund has recently invested €150m in Düsseldorf and Lyon and is expected to close a deal in Milan before year-end.