GLOBAL - Institutional investors have committed €390m to Hines' latest Russian real estate fund, exceeding the US fund manager's fundraising expectations.
The Hines Russia & Poland Fund, which intends to deploy 80% of the capital in Russia and the remainder in Poland, will have more than €900m of investment firepower once leverage is factored in.
Houston-based fund manager Simon Shen told IP Real Estate that Hines had originally targeted an equity raise of between €250m and €300m for the opportunistic fund.
The investors were a mixture of financial institutions, sovereign wealth funds, pension funds, trusts and other institutions based in Europe, Asia and the US.
Hines has already deployed capital from the vehicle to three retail development projects in Russia - with two in Moscow, the Kievsky Outlet Village and Kievsky Retail Park, as well as the Pulkovo Outlet Village in St Petersburg.
Hines' local platform teams in Russia and Poland led by country managers Lee Timmins and Mietek Godzisz, respectively, will execute and manage the investments on behalf of the fund.
Timmins said: "In addition to our successful office developments, we are very excited about the development projects in Russia in the retail, warehousing and residential property sectors.
"These will take advantage of the growth of the Russian middle class and the rapidly growing consumer spending power."
Hines has been an active player in Russian real estate since 1992 and in Poland since 1996, managing more than $2bn (€1.59bn) of assets in the two countries by the end of 2011.
Jeff Hines, president and CEO of Hines, added: "Russia and Poland have long been markets where Hines has enjoyed competitive advantages and exceptional performance in emerging markets that are undersupplied in all asset classes.
"The execution of Hines' best practices by dedicated, local and long-tenured management teams results in a strict approach to risk management that is flexible for local conditions and ultimately delivers better performance to our investors."