The property arm of Italian insurer Generali is planning the launch of a new European core-plus office property fund targeting a size of €2 bn, PropertyEU can reveal.
The open-ended vehicle – Generali Core Plus Fund – is the group’s first to pursue this risk-return investment strategy and is expected to be formally launched over the next few weeks. It has already raised €500 mln of equity commitments from the different insurance companies of the group, with a few third-party investors also in the final process of signing up, according to Nicholas Garattini, head of business development at Generali Real Estate. ‘We are targeting total equity of around €1 bn,’ he told PropertyEU in an interview.
With leverage, the fund is expected to build up a portfolio of roughly €2 bn over the near-medium term, with targeted returns in the 7-8% range.
Generali Core Plus Fund will be targeting big-ticket office properties in the three digit range in the main European capital cities. The vehicle will focus both on assets with vacancies of up to 30% as well as on fully-let properties with short leases, generating immediate cash-flows to pay investors a yearly coupon as well as providing an opportunity to add value and extra returns in the long run. Main target cities include Paris, Berlin, Frankfurt, Munich as well as Milan, Rome, Madrid, Barcelona, Warsaw and Prague.
