BMO Real Estate Partners (formerly F&C REIT Asset Management) said on Monday it has secured €150 mln of equity commitments from German institutional investors for its first pan-European investment fund.

BMO Real Estate Partners (formerly F&C REIT Asset Management) said on Monday it has secured €150 mln of equity commitments from German institutional investors for its first pan-European investment fund.

The new fund is targeting some €350 mln of equity which, with 50% debt, will give it fire power of up to €700 mln. The vehicle is aimed at German institutional investors and aims to deliver a net return of 4% per annum over its 10-year life span. It is not available to UK investors.

The fund will invest in core and core-plus retail properties and shopping arcades in prime high-street locations of European cities. Once fully invested, the portfolio will consist of six to 12 properties. One property in Paris has already been secured and final negotiations for other assets are under way.

'We’ve seen strong interest from our clients for a cross-border product encompassing the UK and Continental Europe and our new strategy has been specifically designed to meet that demand,' said Nick Criticos, CEO of BMO Real Estate Partners. He added that the company expects to launch more pan-European property products in the future.

The fund is managed by Ian Kelley, fund director for Europe BMO Real Estate Partners. 'Premises within prime high streets of European cities, particularly economic centres that are also attractive tourist destinations, are highly sought after by international retail brands,' he said. 'As eligible properties are in extremely short supply, this has resulted in high rents that continue to go up at lease-end. Our focused sourcing initiatives and off-market approach with tailoring transactions are key drivers to unlocking these rarely traded assets.'