Pictet Alternative Advisors (PAA) has confirmed the launch of its Real Estate Capital - Elevation I fund, focusing on property assets in 'smart and gateway' European cities.
In March, Zsolt Kohalmi, global head of real estate and PAA's co-CEO, told PropertyEU that the firm was about to launch a pan-European value-add fund looking to make 'mid-teen' returns. He said at the time that a first close had already been held with 'committed partners', but declined to provide an overall equity target.
Elevation I is a closed-end investment vehicle with an eight-year term, targeting a final close by the end of the year, according to PAA.
The AIFMD-regulated vehicle will be managed by a 14-person team under Kohalmi's guidance, with local real estate specialists in the UK, Germany, Sweden, Spain, Luxembourg and Switzerland.
'Europe is currently the most attractive global market for real estate investment on a risk-adjusted basis,' Kohalmi said. 'It has stable cap rates due to continued low interest rates and has finally started seeing rental growth. We expect the volatility in Europe in the coming years to provide interesting entry point opportunities. We believe that Europe will remain a compelling investment opportunity in real estate for some years to come.'
Kohalmi added: 'As occupiers’ desires evolve, technology and the expectation of more environmentally-friendly buildings is also influencing demand, which provides an opportunity to create stock that is currently in short supply. Elevation Fund I will also put significant emphasis on proptech solutions for its deal origination as well as asset management.'
PAA said it was also planning to raise a second real estate fund with a core-plus strategy within the next 12 months.
