Greystar says it has created the largest pan-European value-add residential fund, having raised €2.7bn from investors.
The US-headquartered residential specialist has held a final close for Greystar Equity Partners Europe II (GEPE II), which with debt financing is projected to have more than €6.8bn to invest in existing buildings and developments across European cities.
The fund is more than three quarters larger than its predecessor, which raised €1.5bn in 2022.
Investors from across Europe, North America, the Middle East and Asia-Pacific committed €2.2bn directly to GEPE II, while a further €550m was secured for discretionary co-investment vehicles. Greystar said commitments were anchored by sovereign wealth and pension funds, but also included first-time investments from family offices.
GEPE II is designed to invest across the rental living sector with a focus on purpose-designed multifamily and student accommodation. Key markets for the fund include the UK, Spain, the Netherlands, Germany, Austria, Denmark, Ireland and France.
More than €910m of equity has already been invested or committed across 28 investments totalling close to 13,000 homes and beds. A further €425m is associated with “advanced pipeline opportunitiesæ, Greystar said.
Greystar said the fund’s portfolio is expected to include new-generation assets with high sustainability standards and assets with attainable rents that will provide high-quality housing for the “missing middle” in an environment of increasing homeownership costs.
Daniel Breeden, senior managing director, investment, Europe at Greystar, said: “European rental housing remains one of the most compelling places to deploy capital. We are seeing markets that display chronic undersupply, constrained new delivery and a widening gap between the cost of renting and owning. We believe that patient, operationally-capable investors are best placed to capitalise on these conditions – and GEPE II’s goal is to do exactly that.
“What gives me confidence is not just the market backdrop, but what our teams have built across Europe over the past decade. That depth of presence has translated into increased deal flow through the relationships, local credibility and judgement that have supported us to move decisively when the right opportunities emerge, and to create homes that people are proud to live in.
“Closing above target size, with capital from some of the world’s most sophisticated long-term investors, reflects their confidence in that approach. Across Europe, access to high-quality housing is becoming one of the defining pressures on urban life, and we believe long-term institutional capital has an important role to play in addressing that.”
Wes Fuller, CIO of Greystar, said: “In our view, rental housing is one of the most compelling long-term investment themes in global real assets. It is structurally supported by demographically-driven demand and chronic undersupply and has historically demonstrated resilience across economic cycles – performing better than other property sectors through both the global financial crisis and the pandemic – and it addresses a genuine social need.
“We have seen this combination drive institutional capital towards the sector, and towards vertically integrated operating platforms that can execute at scale.”
To read the latest IPE Real Assets magazine click here.
