The German arm of Sweden's Catella Property Group and Italian real estate fund manager Castello SGR are joining forces in a new joint venture to invest up to EUR 1 bn in European real estate. Castello, which specialises in closed-end fund management, said that the new partnership aims to invest in various real estate segments on a Europe-wide level, and to consolidate its presence in Italy.
The German arm of Sweden's Catella Property Group and Italian real estate fund manager Castello SGR are joining forces in a new joint venture to invest up to EUR 1 bn in European real estate. Castello, which specialises in closed-end fund management, said that the new partnership aims to invest in various real estate segments on a Europe-wide level, and to consolidate its presence in Italy.
The first step of the partnership involves the launch of a new fund called Focus Alpe Adria, which is open only to institutional investors and has a target size of roughly EUR 200 mln. With debt, the fund will have the firepower to invest around EUR 400 mln in the Alpine region. It will invest in office, logistics and retail assets in the Alpine regions of Italy, France, Austria, Switzerland, Germany and Slovenia.
The vehicle has a target return (IRR) of approx 10% with an estimated dividend yield for investors of 5-6%. The launch of the fund is expected for the beginning of 2010, after the appropriate authorisation has been received. The joint venture has identified interesting investment opportunities in Munich, Nuremberg, Innsbruck, Salzburg and several large cities in the north of Italy, the two partners said.
As part of the agreement, Catella Re is to acquire a 10% stake in the Italian firm via a capital increase. The joint venture agreement is subject to approval by the Bank of Italy. Law firm Latham & Watkins acted for Castello SGR. Catella Real Estate AG was advised by NCTM.
