Standard Life Investments has completed the fifth and final close of a new closed-ended real estate investment vehicle focussed on selective Continental European real estate markets.
Standard Life Investments has completed the fifth and final close of a new closed-ended real estate investment vehicle focussed on selective Continental European real estate markets.
The performance of the European market as a whole will improve significantly over the next three years, according to Anne Breen, Head of Real Estate Research & Strategy at Standard Life Investments. 'We see opportunities across Europe in 2015, led by northern markets and followed by southern markets,' she said.
The switch to Europe follows a stand-out year for the UK, which is on track this year to deliver the highest returns since 1993.
The Standard Life Investments European Real Estate Club has attracted capital from institutional investors in the US, Canada, Thailand, the Netherlands, UK and the Middle East. Total equity raised was over €300 mln providing over €600 mln of investment capability once the target gearing of 50% is deployed.
Over 60% has already been committed to assets in France, Denmark and Germany and there is a pipeline of other opportunities in progress, according to David Paine, Head of Global Real Estate at Standard Life Investments. He added, however, that Europe presents a mixed picture and that the company is selective in where it invests. 'What we are seeing is that there is capital for deployment in Europe in specific areas,' he said.
Daniel McHugh, head of Continental European real estate at Standard Life Investments said: 'We identified a market opportunity to acquire prime assets in certain core locations with some measured risk attached. We believe this asset profile offers an attractive return to investors with lower risk. The club strategy is core-plus in nature, but over the vehicle life it is targeting a 13% net IRR (net financial return on investment).'
