Valad Europe is to invest €250m in France via its European Diversified Fund.
The fund, which has a core-plus, value-add strategy, has so far invested in Germany and the UK. Valad said it had secured a further €190m from investors following €180m of commitments to the fund late last year.
Leveraged at between 50-65%, the latest commitments to the fund take its investment capacity to €1bn.
Chief investment officer David Kirkby said the decision to invest in France – not part of the fund’s initial strategy – was taken as a “counter cyclical play”.
Kirkby told IP Real Estate: “We said we’d start with UK and Germany and France was on our watchlist.”
Backed by US, Middle-Eastern and European investors, the fund, he added, would concentrate on France’s main cities, outside of Paris, where there has been less yield compression.
“We’ve got flexibility from our investors,” Kirkby added. “Yields have not compressed outside the Paris region of Ile de France, somewhere we are less likely to be investing.
“There’s depth of market – the pipeline’s there.”
The fund, which has so far invested €234m in 14 assets in the UK and Germany, has a further €229m under offer.
“We’re going to stay with those three countries for the time being,” Kirkby said.
The fund is typically focused on office, retail and industrial distribution warehouse/smaller logistics sectors in the €5-50m range. Kirkby said the fund is comfortable with some leasing and repositioning risk.
“We have good flexibility across sectors,” he added. “We’re a cross between core-plus and value-add.”
In the UK, Kirkby said the fund was looking to invest in small to medium-size assets with similar tenants and use, which could in the future return a premium if sold as a portfolio.
