Moorfield raises over €447m for 3rd fund, buys London office

UK fund manager Moorfield Group has raised over £350 mln (€447.5 mln) of equity in the final close of its Moorfield Real Estate Fund III (MREFIII).

Together with additional joint venture capital, Moorfield expects to invest around £500 mln of equity over the next three years, topping this up with leverage where needed.

MREFIII is a UK-focused opportunistic/value-add fund with a targeted risk-adjusted internal rate of return (IRR) of around 15-20%. Its investors are based in the US, Europe and Japan.

The fund’s most recent acquisition is the Aurora office building in Ealing, West London, which was bought from Threadneedle Investments for £22 mln (€28 mln) in an off-market transaction in late December 2014.

Aurora was built in 1996 and comprises around 4,800 m2 over the ground and four upper floors. It is let in its entirety to market research company Dunnhumby until May 2016. MREFIII is working in a joint venture with XLB Property on Aurora and JLL advised Threadneedle Investments.

Aurora joins four other MREFIII UK investments including 100 Barbirolli Square in Manchester, Quartermile in Edinburgh, a Private Rented Sector (PRS) scheme at Queens Dock in Liverpool, and the Energy and Innovation Parks in Aberdeen.

In a separate transaction announced in December 2014, Moorfield sold a diversified real estate investment portfolio to US private equity firm Lone Star for around £1 bn.

For more on the prospects for the UK real estate market, see the article and video interviews from our Outlook 2015: Europe/UK & Asia Capital Flows investment briefing.