Carrafiell's Greenoak fund begins deploying €700m war chest in Spain

Global fund manager Greenoak has acquired 320,000 m2 of real estate in various transactions focused on the Madrid area for a fund that has €700 mln of investment capacity for the Spanish market.

To date Greenoak’s Continental European private equity real estate fund has acquired or has committed to acquire €325 mln of assets in a number of transactions.

'In our opinion, Spain, along with Italy, continues to be amongst the best distressed, deep value real estate opportunities in Europe, if not the world, combining deep value from forced sellers — with strong economic growth and recovery,' commented John Carrafiell, Europe-based co-founder of Greenoak.

'What differentiates us is simple: we are laser focused only on Spain and Italy for this fund. That dedication of resources and their singular focus, results in performance when the situation requires a buyer who can deliver. That is why we often secure assets off-market, working exclusively, one-on-one with a seller,' Carrafiell said.

Carrafiell was global co-head of Morgan Stanley Real Estate (MSREI) from 2005-2007. He founded Greenoak in 2010 with Sonny Kalsi, also a former global co-head at MSREI, and Fred Schmidt, who previously served as head of Asia Investing for the Morgan Stanley Real Estate Funds.

Greenoak is focusing on well located, quality buildings in need of recapitalisation and hands-on repositioning management. Carrafiell: 'We close deals as small as €8-25 mln, which isn’t the target of most funds or the listed Socimis (Spanish real estate investment trusts). With a team of experienced property and assets managers in our dedicated GreenOak Spain platform, we implement asset strategies ourselves, while equally working with "best-in-class" partners.'

Equity raising
The fund had its final closing in July, only eight months after its first close, with commitments hitting the 'hard cap' of €250 mln early, and doubling its target equity raise of €100-€150 mln. With leverage set at 65%, the fund can acquire or develop real estate with a cost of over €700 mln. In addition, Greenoak has said it may also bring in co-investors in particular deals.

The fund is looking to invest in logistics, office, retail, and residential assets, mainly in Madrid, Barcelona, and other large Spanish cities. The fund can also invest in land with planning for development. Italian real estate market is another potential target.

The fund comprises institutional investors from North America, Europe and Asia. The investors include large corporate and government pension funds, foundations, large family offices, and fund managers.

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