Five international investors have committed €422m to the TH Real Estate European Cities Fund, bringing the total equity raised to approximately €1bn.
Launched in March 2016, the open-end fund targets core assets in the office, industrial and retail sectors in European cities that TH believes are structurally positioned to increase in value over a long-term horizon. By July last year, the fund had raised €500m from institutional investors.
Current holdings include Helsinki’s premier shopping centre Kamppi, the Xanadu Shopping Centre in Madrid, The mixed-use Omni Centre in Edinburgh, and The Cube in Berlin, a prime office development located in front of Germany’s parliamentary building.
TH Real Estate employs a proprietary filtering and scoring system to rank more than 200 cities in Europe according to soft factors such as quality of life, hard data such as population, and growth indicators such as discretionary spending.
The investment process emphasises “a focus on long-term structural and demographic trends,” said fund manager Andrew Rich. The objective is “to look beyond short-term cycles to deliver long-term growth and income”.
The fund has deployed €940m, with two more office property transactions “close to completion”, according to TH Real Estate, which currently manages around $103bn in property assets.
“You can expect more investment from us on the equity side,” said Mike Sales, global head of TH Real Estate. “But it’s going to be very focused on what we call winning cities, which we believe are going to be accretive from a growth perspective and positioned to preserve value as well.”