In spite of concerns the sector is late in the cycle, 2017 was a good year for real estate fundraising in Europe.
Private funds raised €26.4B last year, according to data from Preqin, the third-highest amount on record, slightly down on the €27.8B raised in 2016.
Here is a rundown of the biggest European funds raised. Opportunity funds buying Spanish banks and debt funds lending to film studios dominate the list.
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Blackstone Real Estate Partners Europe V
As ever Blackstone dominated the capital raising scene in 2017, with its fifth European real estate fund netting €7.8B, the largest ever raised in the region. In the U.K. the fund took a majority stake in flexible office company The Office Group in a deal that valued it at £500M. A big chunk of it was spent on the acquisition of 51% of Banco Popular’s €10B Spanish real estate portfolio.
Kildare European Partners II
Kildare is run by Sunderland F.C. owner and former Lone Star partner Ellis Short, and typically focuses on loan portfolios or distressed assets. Deals so far for its $1.95B second fund include the purchase of an 840K SF Dutch office portfolio for €90M.
AXA Investment Managers - Real Assets CRE Senior 10
AXA has been by far the most successful fund manager when it comes to raising debt funds. The €1.5B raised for its 10th senior debt fund takes its total raised for senior debt lending to €14B. When the fund held a final closing in September, AXA said the fund had already deployed around €400M of the capital raised.
Orion European Real Estate Fund V
Orion raised €1.5B for its fifth fund in March, and public pronouncements and statements would suggest it has not yet bought anything. That is something the sector should take note of — Orion famously sat on the fund it raised in 2006-07 because it thought the market was overpriced and then cleaned up at the bottom of the downturn in 2008 and 2009.
Pramerica Real Estate Capital VI
Like AXA, Pramerica was in the vanguard of real estate debt funds and continues to raise significant amounts of money for the strategy — £1B for its sixth such fund. The fund provides senior debt, whole loans, mezzanine debt and preferred equity.
LaSalle Real Estate Debt Strategies III
LaSalle raised £804M for its third debt fund, which can lend across Europe, with a focus on the U.K., in all types of debt. Deals it has undertaken include lending against a U.K. portfolio bought by BMO and a designer outlet in Scotland bought by Blackstone.
Meyer Bergman European Retail Partners III
Meyer Bergman raised €816M for its third retail-focused fund, and has undertaken some innovative deals alongside buying high street units in cities like Oslo. It is part of the consortium which is funding the creation of a new landmass by building into the sea in Monaco, and will own the super-luxury retail element of the scheme.
BlackRock Europe Property Fund IV
The $764M raised by BlackRock for a new value-add fund was the first time it had raised capital for this type of investment since buying value-add specialist MGPA in 2013. A big focus of the fund has been U.K. student accommodation and Parisian and German offices.
DRC European Real Estate Debt Fund III
DRC raised £600M for its third European debt fund, which focuses on the higher-margin end of the lending market — whole loans and mezzanine debt. Significant deals it has undertaken include providing some of the debt used by private equity firm Aermont to finance the £400M acquisition of film studio Pinewood, where parts of the James Bond and Star Wars franchises are filmed.
GreenOak Europe Secured Lending Fund
GreenOak, run by Morgan Stanley and Lehman Brothers alumni John Carrafiell and Jim Blakemore, raised €600M for its European lending fund in December. The fund provides loans of up to 75% loan to value, ranging between €5M and €100M, with the capacity to go higher. When it raised the capital, GreenOak said the fund was already 60% deployed across 12 loans secured by 60 properties in Germany, the Netherlands and Ireland.
To hear from some of the biggest investors in the market join us at Bisnow's London Capital Markets event on 22 February at 7.30am.
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