JP Morgan Asset Management is investing in offices in Berlin and Paris as it kicks off a €3bn opportunistic investment drive in Europe.
It is understood that the assets have been acquired as part of a non-core stategy targeting the UK, France and Germany.
The US investment manager is investing around €70m in the two properties, which both require capital expenditure.
Investors – including institutions from Asia and North America – have committed to the new venture. At least two investors have previously backed core funds managed by JP Morgan.
A source said around €350m had been raised in a first close, with a hard cap of €750m.
With leverage of up to 75%, JP Morgan will then use the platform to invest as much as €3bn across traditional commercial real estate sectors, with office, retail and industrial the main focus. The firm will look to enhance the value of properties through refurbishment or by increasing occupancy.
In a note from the firm’s head of research & strategy, Joe Valente in April this year, said the “time to act is now”.
He said: “Investors will inevitably have to take on additional risk in smaller, less liquid markets, in order to generate the type of returns available in core European markets during the early stages of the cycle.”
The window to take advantage of outsized returns is, he added, much narrower.
As of June this year, opportunistic funds had raised €11.9bn over the past three years, JP Morgan noted, a ”a fraction” of the opportunity size it estimated to be close to €250bn in 2012.
JP Morgan was not available for comment.
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