Property funds raise €3b globally in January

Capital commitments worth $4 bn (€2.99 bn) were announced by real estate funds globally during January, according to Indirex, the security information exchange for non-listed real estate funds.

There were five announcements in Europe during the month, four of which involved successful raises. The largest of these was the €390 mln first closing of Harbert European Real Estate Fund III and the €225 mln commitment received by the Schroder Core European Property Fund.

AXA Caesar Fund announced an extra €90 mln on its final closing, providing it with a total of €209 mln and marginally beating its €200 mln target. DIC High Street Balance also announced a first closing of €90 mln which will be invested in core German retail.

There were six announcements in the UK with four reporting new capital raises. This makes January the busiest month for UK activity in over a year, Indirex said.

The most notable raisings were from ICG-Longbow which raised capital for two funds. ICG-Longbow Senior Secured UK Property Debt Investments raised £105 mln through the first London listed fund IPO of 2013. The firm also raised a further £212 mln for ICG-Longbow UK Real Estate Debt Investments III.

Also in the UK, AXA REIM announced the launch of its UK Long Lease Property Fund with an initial £125 mln and a target of £1bn. January also saw the formation of GRIP; a new JV between London-listed residential property specialist Grainger and Dutch pension fund asset manager APG.

APG invested £158 mln, with Grainger putting in £59 mln, consisting of the proceeds from its stake in G:res and an additional £9 mln of new equity. GRIP will acquire the residential property portfolio owned by G:res, a UK residential fund set up and managed by Grainger which was due for liquidation.

Globally, 24 announcements were reported during the month, and 17 of these confirmed new equity commitments. Overall, diversified funds are again the prominent feature of the capital raising landscape, accounting for over 50% of reported activity. Offices and debt were the other well-represented sectors.

The largest raise reported in January was for the pan-global Northwood Real Estate Partners Fund, holding a final close of $500 mln.

Indirex said 16 of the funds featured in January have opportunity and value-add strategies.