Hines has raised an additional €305m of equity from institutional investors for its latest value-add European real estate fund.
This latest boost to the Hines European Value Fund 3 (HEVF 3) fund takes its total value to €1.45bn, placing it on track to smash its €1.5bn final close set for November.
With this latest closing, HEVF 3 has now attracted commitments from 30 limited partners, including major pension fund investors across the Americas, Europe and Asia Pacific, alongside a Hines co-investment.
Furthermore, 57% of the commitments have been made by existing investors in the HEVF series, demonstrating strong conviction in the strategy and Hines’ ability to execute it effectively, the manager said.
Paul White, senior managing director and fund manager of the HEVF series said that after adopting a prudent and patient stance for much of the last year, ”in recent weeks the pace of allocation of HEVF 3 has accelerated”.
In keeping with the consistent strategy of the HEVF series, HEVF 3 is expected to acquire a value-add portfolio diversified across major sectors in primary European markets.
The fund’s first two investments involved a “highly sustainable” student housing project in Barcelona and a brown-to-green office modernisation project in Cologne. Hines also recently acquired Film House, a vacant 103,000sqft office and restaurant building in the West End of London for HEVF 3.
White said: “We expect to exceed our original fund-raising target of €1.5bn, despite the very challenging market conditions, and we are excited about the potential for HEVF 3. We have been patient with our dry powder and very intentionally applied a high threshold of selectivity over the last year, only committing to two investments up to May 2023.
”We are finally feeling steadier market ground and returning liquidity at appropriately re-based pricing. We are convinced we can invest into a generational cycle correction, while post-Covid behaviours and the ESG agenda cut across existing supply and demand patterns. We anticipate this being a productive period for us to use our off-market origination network, our expert knowledge of fundamentals, and our value-creation skillset across the lifecycle of real estate assets to great effect for our investors.”
The HEVF series sits alongside Hines’ other European flagship funds including its open-ended core-plus vehicle, Hines European Property Partners, and long-term core strategy, Hines European Core Fund.
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