Cordea Savills is planning to launch a pan-European follow-on fund with an open-ended structure.
The core fund would initially look to attract as much as €500m from investors with gearing of 30-40%, following on from Cordea Savills’ existing €700m European Commercial Fund (ECF) which is now fully invested.
The fund would target an income return of 6%, marking a move up the risk curve from ECF’s 5% return requirement.
Justin O’Connor, chief executive of Cordea Savills, said: “We think the time is right to go out and launch new funds.
“This will be very much based around stock selection.”
The vehicle, aimed at insurance and pension funds looking for liability matching, would invest in smaller lot sizes between €20m and €40m, looking for yield advantage in all main property sectors. Cordea Savills will look at assets with shorter leases, O’Connor added. The fund – a Luxembourg FCP – would have a mandate to invest in France, Germany, the Nordics and UK.
Last year, Cordea Savills launched its first Spezialfonds in Germany. O’Connor said the company was more comfortable with expansion in the markets it is familiar with. He did not rule out “buying growth” through a corporate acquisition in the future.
Meanwhile, Cordea Savills’ Charities Property Fund has reached £670m of investment, with 15 assets bought last year for £130m.