GERMANY – Real estate investment manager Valad Europe said it has raised £150m (€178m) in equity for a new diversified fund to own assets in the UK and Germany.
The first close has resulted in £150m of equity for the fund – the Valad European Diversified Fund – which has a capacity of £375m, the company said.
The fund has been set up to invest in core plus and value-add assets in the UK and Germany, and will use between 50% and 65% leverage.
Initial equity for the fund was provided by a number of large international investors, it said, including a new investor partner, which it did not name.
Debt financing for the fund would be sourced from a group of lenders who had existing relationships with Valad Europe, the investment manager said.
Within the UK and Germany, the fund would target good quality, well-located assets across the office, retail and industrial distribution warehouse and smaller logistics sectors, it said.
It will look for strong-credit tenants with non-institutional remaining lease terms, and target individual lot sizes of between £5m and £20m.
Alongside this, the fund will invest in small to medium-sized portfolios.
The fund had already bought one asset, it said.
This was a 26,242ft2 (2,438m2) retail warehouse in Aintree, Liverpool, which was let to building supplier Wickes.
The fund had also exchanged contracts to buy an office asset in the south east of the UK, as well as secure a German logistics portfolio and a retail asset in Frankfurt.
David Kirkby, CIO at Valad Europe, said: "We envisage a narrowing of the prime-secondary spreads during the fund's life, both in the UK and German real estate markets."
The firm's local teams are aiming to buy good value, high quality, leasable assets with strong covenants, he said.
Valad Europe manages €4bn of assets.