European privately-owned multi-let specialist M7 announced on Friday that it has gained a new shareholder with the sale of a minority stake in the business to Hong Kong investment firm TTB Partners.
The transaction is part of M7’s strategy to tap into Asian investors’ appetite for European real estate and is the latest step in a wider collaboration between the two companies. It is also part of M7's policy of selling or issuing equity to third parties who can help the group achieve its strategic objectives.
Going forward, TTB will utilize its own network of contacts in the Asia Pacific region to access new capital pools looking to invest in UK and pan-European real estate, either through joint ventures or through investment funds.
M7 Real Estate is an independent fund manager majority owned by its senior management (70%) with around 30% held by third parties, including TTB and a major Asian family office. The firm holds a €5 bn portfolio spread across 830 properties in 14 European countries. Its fund products have realised a cumulative net IRR of 28.3% and 2.12x on over €2.25 bn of assets, held across 14 fully exited vehicles.
‘This partnership marks an exciting development for TTB,’ said TTB Co-founder Jonathan Bond. ‘We are very pleased to formalise our relationship with M7, having worked together for some time including active investment in their fund product. Despite challenging current market conditions, we continue to see a strong trend of Asia-based capital pools searching for robust European assets with a particular interest in asset classes such as regional offices and retail warehousing. These asset classes are expected to benefit from increased demand as working patterns and consumer habits continue to evolve as a result of the Covid-19 crisis. We now look forward to helping M7 strengthen its growing presence in Asia.’
Richard Croft, Chairman of M7 commented: ‘Since we formed M7 Real Estate, Asian investors have been a very important source of capital for our business and we are fortunate to have many long-established partnerships and clients in the region.’
Despite the current Covid-19 crisis M7 continues to believe ‘in the underlying fundamentals of many parts of the UK and European real estate market over the long term’. ‘We also have strong ambitions to continue to grow M7 and recognise both the ongoing strength of demand for European real estate from Asian investors and the importance of finding new partners in the region who can help us achieve our goals. Having worked with TTB for some time now and been impressed by the depth and breadth of their relationships, we are therefore very pleased to welcome them as a shareholder in M7 while looking forward to working with their team in the future,’ Croft added.
