UK real estate investment manager Newcore Capital achieved a £100m first close this week for its £375m (€442m) core-plus fund, the Newcore Social Infrastructure Income Fund (NSIIF).
The fund has secured three institutions as cornerstone investors: The Parliamentary Contributory Pension Fund, a local government pension scheme and an insurance company client of Capricorn Private Investments, an outsourced investment office.
NSIIF focuses on UK real assets with essential social infrastructure uses, such as education, childcare, clinical healthcare, transport, and waste management. It targets returns of 9%-11% per annum internal rate of return, with a 4-5% annual dividend.
“This milestone has been achieved against the backdrop of a particularly difficult capital-raising market and demonstrates that a clear three-dimensional focus on sustainability – financial, environmental, and social – can deliver positive results for fund managers, by securing commitments from high quality investors with similar aspirations for their capital,” commented Newcore Capital CEO Hugo Llewelyn.
In two other major fundraisings this week, PGIM Real Estate raised $2bn (€1.9bn) for its first-ever global data centre fund while Dutch-managed Amvest received a €250m capital commitment for its living and care property fund from Gasunie, Woningcorporaties and a third unnamed Dutch pension fund.
Hotels were one of the most active segments this week, with a number of new assets coming up for sale and a major refinancing being announced. Hyatt Hotels & Resorts is said to have put a €120m hotel portfolio in Tenerife back on the market shortly after completing the acquisition while key European cities like London, Milan and Madrid reported new sale processes of individual assets for prices between €40 and €50m. In Greece, a new €800m hotel portfolio is reported to have gone on sale in what is potentially the largest deal in the country this year.
In the refinancing section, lender Aareal provided a €567m financing package to refinance a portfolio of seven hotels. The portfolio is owned by Archer Hotel Capital, the joint investment vehicle of Singapore’s GIC and APG, a subsidiary of Dutch pension fund ABP.
“European hotel investment is likely to ramp up in 2025, with significant growth in the proportion of investors planning to deploy at least as much capital, if not more, in the year to come,” said Jon Hubbard, head of hospitality EMEA at Cushman & Wakefield, which just released the fourth edition of its Hotel Investor Compass survey.
“The improving sentiment is partly a result of the more favourable interest rate environment, with the European Central Bank slashing rates four times in 2024, and further cuts expected this year, but investors also expect capital appreciation across all regions in 2025, driven by strong recent hotel performances and robust demand,” Hubbard said.
Assets on the market | |||||||
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Asset | Asset type | Location | Vendor | Size | Price (million) | Broker | Key facts |
Tthree-asset portfolio | Hotel | Tenerife | Hyatt Hotels & Resorts | 1,200 rooms | €120 | NA | The portfolio includes the Alua Atlántico Golf Resort, Alua Tenerife, and Alua Soul Orotava Valley. |
The Hanningtons Estate | Mixed | Brighton, UK | Redevco | 152,161sqft | £57 (€68) | NA | The deal reflects a net initial yield of 7.49%. |
Partnership House, on Carlisle Place | Office | London | John Lewis | 37,460sqft | £46 (€54) | Koopmans | The asset brings in a passing rent of nearly £2.5m, with the sale reflecting a 5% net initial yield. |
easyHotel Madrid | Hotel | Madrid | Extendam | 230 rooms | €50+ | NA | The asset was bought in June 2020. |
Leicester Square hotel | Hotel | London | Z Hotels | 95 bedrooms | £42 (€50) | Avison Young UK and JLL | Structured as a sale-and-leaseback, the operation comes with a guaranteed 35-year leaseback to Z Hotels. |
Voco hotel | Hotel | Milan | Alivest S.p.A | 280 rooms | €40 | NA | The hotel opened its doors in 2021. |
One East Parade | Office | Leeds | Schroders Capital | 53,834sqft | £17 (€20) | CBRE | A deal would reflect a net initial yield of 8.8%. |
Clifton Heights | Office | Bristol | NA | 26,830sqft | £16 (€19) | Hartnell Taylor Cook, Griffiths Eccles | The building could be transformed into 119 apartments, 261 student studios or a 238-bed hotel. |
Edward Square retail complex | Retail | Galway, Ireland | Signature Capital | 24,984sqft | €8 | TWM and JLL | The building is occupied by three tenants – Starbucks, Intersport Elvery’s and New Look. |
Mariankatu 9 and Mariankatu 11 | Office | Helsinki | Senaatti-kiinteistöt | 8,600m² | NA | NA | Indicative bids for the properties are due by 16 June 2025. |
Recently completed loans | ||||
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Lender(s) | Borrower(s) | Asset(s) | Loan size (million) | Key facts |
ABN AMRO, BNP Paribas, CA-CIB, HSBC and ING | CBRE Investment Management | Unsecured | €1,000 | The loans are a €250m RCF to bridge equity and for general working capital purposes; a €300m term loan facility to bridge medium-term debt to fund new acquisitions and developments and a third €450m short-term bridge facility. |
Aareal Bank | Archer Hotel Capital | Portfolio of seven hotels in four countries | €567 | Archer Hotel Capital is the joint investment vehicle of Singapore’s GIC and APG, a subsidiary of Dutch pension fund ABP. |
Bond investors | Citycon | Unsecured | €450 | The 6.25-year senior unsecured fixed rate EUR-denominated Bond pays a fixed coupon of 5.375%. |
Pbb | EQT Real Estate | Polish logistics portfolio | €120 | The portfolio comprises four properties providing over 220,000m². |
Barclays, HSBC, Lloyds, NatWest and Santander | Bruntwood SciTech | Three projects in Manchester | £100 (€120) | The loan has a 3-year term. |
Redevco | Original Works | 10 Salisbury Square in London | £47.5 (€56.8) | The facility will support the acquisition and refurbishment of a 56,000sqft office-led scheme. |
Eldridge Real Estate Credit | Greystar | Development site in Madrid | €56 | The construction loan will fund the development of an apartment project, located in Boadilla del Monte. |
Aviva Investors | Cardiff and Vale College | Two new campus developments for Cardiff & Vale College | NA | The campus is expected to provide 6,000m² of space for up to 900 students each year while the 13,000m² Advanced Technology Centre (ATC) is expected to accommodate 2,000 students when completed. |
Funds on the market | |||
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Firm | Fund | Strategy | Details |
Newcore | Newcore Social Infrastructure Income Fund | Delivering sustainable long-term income and capital returns from a functional portfolio of UK real assets enabling essential social infrastructure uses, such as education, childcare, clinical healthcare, transport, and waste management. | The company has achieved a £100m first close for its £375m core-plus fund. |
The Fund has secured three institutions as cornerstone investors: The Parliamentary Contributory Pension Fund, a Local Government Pension Scheme and an insurance company client of Capricorn Private Investments. | |||
PGIM Real Estate | Global Data Center Fund | Investing in data centres across the world. | The firm has raised $2bn (€1.9bn) for its first-ever global data centre fund. |
Amvest | Living & Care fund | Investing in healthcare real estate | The firm has received a €250m capital commitment for its living and care property fund from Gasunie, Woningcorporaties and a third unnamed Dutch pension fund. |