Schroder Real Estate has launched its first European REIT, with backing from UK and South African investors.

With GDP growth returning, the Schroder European REIT vehicle, which will be listed in London and Johannesburg, is aimed at Europe’s “growth cities”, the investment manager said.

Schroders said the REIT’s initial placing had raised £107.5m (€148.2m).

It expects to return 5.5% to shareholders once the REIT is fully invested.

Duncan Owen, global head of real estate at Schroders, said the manager had developed “good new relationships with a large number of South African institutions and wealth managers”.

Schroders said it had identified key target centres in the euro-zone with rental growth as a consequence of constrained supply, improving infrastructure and competing demand from high-growth companies for multiple uses.

The vehicle will be leveraged to a maximum 35% loan-to-value ratio.

Schroders will invest up to 10%, or a maximum of £15m, in the fund.