German investors back BMO Real Estate’s first pan-European fund

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BMO Real Estate Partners has achieved a first close on its debut pan-European real estate fund.

German investors committed €150m to invest in high street retail properties across a number of European markets.

The real estate manager, previously known as F&C REIT, changed its name this year after Canadian bank BMO took over parent company F&C in 2014.

Ian Kelley, hired in May as head of France and fund director for Europe, told IPE Real Estate that BMO Real Estate hoped to raise a total of €350m by the end of the year.

With leverage, the fund would have €700m to invest.

BMO will not be co-investing in the new fund, but real estate chief executive Nick Criticos said the bank was likely to be a cornerstone investor in some of its future products.

“They are extremely supportive of our growth aspirations,” he added.

The new fund, which is close to securing its first acquisition in Paris, is pursuing a core strategy, targeting net returns of 4%.

Kelley said the new fund, structured as a German Spezialfonds, offered investors a “defensive” position should European real estate markets eventually correct.

He said high street retail was one of the few sectors in Europe offering rental growth at a time when yields across the markets were converging.

He added that the risk premium was “not being priced in” to some markets.

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  • QN-2519

    Asset class: Fund wrapper.
    Asset region: Global.
    Size: EUR 80m.
    Closing date: 2019-03-29.

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