M7 launches first European fund for third parties, buys portfolio

M7 Real Estate, a European investor and asset manager specialised in multi-let properties, has raised its first Continental European real estate fund for third-party investors.

The vehicle, M7 European Real Estate Investment Partners I (M7 EREIP I) has raised €16 mln of equity at first close. The second close is expected to raise a further €24 mln taking the potential gross asset value of the fund to €100 mln with gearing.

M7 EREIP I, which focuses on the German retail sector, has already acquired an eight-property portfolio comprising a total of 38,350 m2 of space from a private landlord at a value of €46 mln, representing a yield of 8.7%.

The assets consist of four supermarkets, three retail warehouses and a retail park in various locations across Germany. M7 advised on the purchase, which is scheduled for completion in September, and will take charge of the portfolio’s asset management.

'We are looking to put investor equity to work immediately and so capital-raising for our funds is asset specific. Since we have identified additional investment opportunities, we anticipate a second and final equity close in August,' said Richard Croft, M7 Real Estate’s Chief Executive Officer.

The fund was structured by Goodwin Procter and Simmons & Simmons acted as real estate legal advisors to M7 EREIP I.