Civitas to launch €500m European care-based housing fund

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The company, which manages £2.2 bn of assets across three funds in the UK, has been preparing its European entry for the past two years, and is now looking to raise between €260 mln and €500 mln of equity for a new unlisted investment vehicle which will focus on the acquisition of existing assets as well as redevelopment opportunities in the Nordic countries as well as in Germany. The vehicle may also gain a minor exposure to the Spanish market.

Civitas Investment Management is looking to raise the equity from a total of 10-20 European and UK investors over the next 12 months, possibly by the first quarter of 2021, said Andrew Dawber and Tom Pridmore, group directors at the firm. 

‘We have been looking at potential acquisitions and we have been slightly constrained by Covid-19, in terms of physical access to the properties, but we are working very hard towards the fund launch now,’ Pridmore told PropertyEU.

‘What is clear is that we have to be on the ground so we will be joining forces with a local partner but also open our own Civitas office in Europe. We believe there are major opportunities to work in this market segment on a pan-European basis,’ added Dawber.
 
The fund will be looking to retain the assets on a long-term basis, the manager said.
 
The strategy – which will be targeting internal rate of returns of between 6 and 8% - is expected to prove quite resilient to the pandemic, the directors said.

‘We are speaking about self-contained apartments where the flow of people can be carefully controlled and where we have already seen in the UK that the young age profile makes the Covid-19 incident rate very low,’ they said.

In the UK, Civitas manages a listed social housing fund with roughly €900 mln of assets and two other funds set up in joint venture with Schroders and a global Asian real estate investor respectively, for a total of £2.2 bn of social infrastructure assets.