Private investment house Ardian has raised €1.2 bn for its second real estate fund (AREEF II), targeting offices properties in a time of new working trends.
The fund has a diversified LP base with nearly 100 investors – more than 50 of which are institutional – from around the world, attracting capital from 13 countries across the Americas, Europe, and the Middle East.
Stéphanie Bensimon, head of Ardian Real Estate said: 'Companies have been re-thinking ways of working for a number of years, but this shift was accelerated by the pandemic. It brings significant opportunities for real estate investors.
'Tenants are increasingly demanding high-quality and green spaces in strategic locations with strong sustainability credentials or what we call “Green+” buildings.
'With our expertise and now proven track record in the market, our “Build-to-Green+” strategy ensures our investments meet the needs of the workforce of the future.'
Building on progress already made with AREEF I – which attracted more than 50 investors from 11 different countries – this fund will also invest in commercial property assets, mainly in office buildings in strategic locations in Europe.
AREEF II, which met its initial target size, represents an increase of more than 60% on Ardian Real Estate’s inaugural fund, AREEF I, which totaled €737 mln. The fund also saw a re-up rate of 84%.
AREEF II, which is already more than 50% deployed, will invest in assets valued between €50 mln and €250 mln, capitalising on the long-term structural changes of working trends, Ardian said.
Even before the pandemic, corporates were reassessing their workspace needs with a preference for well-located and high-quality spaces to attract talent. Covid-19 accelerated this trend, with companies now upgrading their office footprint to attract and retain talent in spaces fostering innovation, collaboration and social bonding.
Ardian Real Estate will use its operational capabilities to transform obsolete assets into “Green+” assets, which means with strong sustainability credentials, answering the new needs of tenants in key city-centers across Europe.
The firm's carbon reduction trajectory is in line with the 1.5 degree Celsius target set by the Paris agreement in 2016.
The fund has already successfully deployed significant amounts of capital, with more than half of the fund invested or under investment in the core markets of France, Germany, Spain and Italy. With 11 transactions to date, including one exit, AREEF II currently manages over 230,000 m2 across 8 European cities.
'Not only does this fundraise show the resilience of European real estate, it is a significant moment for Ardian Real Estate. Following the success of our investments from the first fund, delivering strong returns to our investors, this second-generation fund has seen an even stronger response from investors and we see significant opportunity for creating value ahead,' Besimon concluded.
