Hard on the heels of the new closing for its Next Estate Income Fund II (NEIF 2) earlier this month, French fund manager BNP Paribas Real Estate plans to ring in the New Year with a spate of fund launches.
Hard on the heels of the new closing for its Next Estate Income Fund II (NEIF 2) earlier this month, French fund manager BNP Paribas Real Estate plans to ring in the New Year with a spate of fund launches.
‘We are already looking to launch the successor to NEIF 2,’ Barbara Knoflach, global head of investment management at BNP Paribas Real Estate (BNPPRE), told PropertyEU this week. ‘It will have a similar investment remit to NEIF 2, although it will likely be bigger, at around €1 bn, including gearing.’
Next up, however, is a new pan-European logistics fund, which BNPPRE expects to launch in the first quarter of next year, according to Knoflach. ‘It will mainly target pension funds and insurance companies and it will be a core and core-plus fund that also invests in markets such as Germany, France and Spain. The first closing is expected to be in the first quarter of next year. We hope to raise around €300 mln in equity which, with leverage, should give us around €500 mln to invest,’ she added.
French and Italian insurers
Earlier this week, BNPPRE announced that it had raised €320 mln in a new closing for NEIF 2, backed by French and Italian insurance companies. The fund, which invests in key eurozone offices, is a pan-European SICAV-SIF based in Luxembourg. The final closing is expected to take place in the second quarter of next year, giving the fund a targeted investment capacity of €800 mln.
The fund recently acquired offices totalling €150 mln in Lyon and Düsseldorf. In September, it purchased the Blue Duo buildings in Düsseldorf from Nordrheinische Ärzteversorgung, the North Rhine Westphalia doctors’ pension fund for an undisclosed sum. Located in the Kennedydam business district, the 31,200 m² scheme is mainly rented to KPMG for about nine years. The fund is also expected to close a deal in Milan before the year-end.
NEIF 2 has an annual distribution target of 5% and a total return objective of 7%, according to Henri Romnicianu, head of investor relations for pan-European funds at BNPPRE. ‘Our approach is based on cities rather than countries,’ Romnicianu said. ‘For NEIF 2, our goal is for a minimum of 50% of the fund to be invested in core and core-plus offices in Germany’s Top 5 markets, as well as in the Paris region. That’s a key covenant of the fund.’ The remaining 50% can be invested in other key cities in the eurozone such as Milan, Madrid, Brussels, Amsterdam, Dublin and Vienna, he added. ‘We’d like the fund to be fully invested by the end of next year. The final closing is scheduled for the second quarter in 2016.’
The fund will not take on any significant letting risk but Romnicianu is willing to forward-purchase offices that are at least 70% pre-let ‘in order to help us build up a portfolio of strong, modern offices’. BNPPRE invested €1.2 bn across its European property funds in the first nine months of this year, compared to €988 mln in the same period last year.