TH Real Estate has completed a first close of €500 mln from institutional investors for its European Cities Fund – its new European diversified core, open-ended fund.
With leverage, the equity commitments will allow the fund to target a portfolio amount of approximately €700 mln from this initial capital.
Commenting on the capital raise, Andrew Rich, European Cities Fund Manager, said it was testament to the fact that investors see value in long-term defensive strategies backed by demographic megatrends, which are driving growth in successful cites. 'TH Real Estate has faith in the underlying fundamentals of the UK and European real estate markets that will remain attractive to investors over the long-term. The founding principles of our European Cities strategy are to look through market cycles and focus on those European cities where people will want to live and work in the future.'
The fund was launched in March 2016 with seed capital and commenced its investment programme by securing an off-market transaction in Meraville Retail Park in Bologna, Italy, as its first asset in May. It is currently progressing a number of other opportunities throughout Europe.
The Luxembourg Special Limited Partnership Fund has target scale of €3-5bn over a five year period. It has a targeted average of 30% LTV.
TH Real Estate has processed over 200 European cities through a filtering and scoring proprietary system, developed by its research team, defining which cities are structurally positioned to grow in value over a long-term horizon. The cities were assessed based on soft (ie quality of life and technology scores), hard (ie g. urbanization and youth population) and growth (ie discretionary spending and population growth) factors, resulting in a defined list of cities supported by such factors and best placed to benefit from long term growth in demand for real estate.
The fund will not invest outside of these specified cities.
