Although individual markets have grown and matured, the pan-European property funds market remains small, particularly when compared with the US and UK national markets. Within this context of modest growth, this article explores three key dimensions to the pan-European market: first, the reasons for the slow growth of the market over recent years and why this has started to change; second, some of the main characteristics of the market; and third, the ways in which this market might develop in the future.
From the Current Issue
Now that the global financial crisis shows signs of abating, German insurance companies are seeking out new investments. In June 2010, the German insurance regulatory authority, the Bundesanstalt für Finanzdienstleistungen or BaFin, provided further support for real estate investments via regulated funds by creating a new eligible real estate asset for German insurance companies — the “14c fund”.
INREV is focused on developing a consistent, industry-wide performance measurement standard for non-listed real estate funds. We believe that this is critical to achieving our objective of creating greater transparency in the industry. The INREV Index, which measures annual performance based on net asset value (NAV), is fast becoming that standard. It is adding significantly to the ability of investors and fund managers to better evaluate their portfolio or fund performance.
The Aberdeen European Balanced Property Fund, sponsored by Aberdeen Asset Management, has acquired a High Street retail property in Gelsenkirchen, Germany.
Prague-based Czech Property Investments (CPI) has acquired a logistics park in Lozorno, Slovakia, for €72.9 million.
Henderson UK Property Unit Trust (HUKPUT), sponsored by Henderson Global Investors, has invested nearly £55 million (€62.8 million) in UK properties.
Invesco Real Estate has sold a 6,000-square-metre office building in Warsaw to Rotaria SA, a Polish private equity firm.
UK-REIT London & Stamford Property Plc has agreed to acquire the long leasehold on a residential property in London for £24.4 million (€27.9 million) from Kilmorie Investments LLP.
MGPA has recently been involved in a number of transactions across Europe on behalf of MGPA Europe Fund III.
Orchard Street Investment Management, on behalf of the Orchard Street UK Special Situations Fund, has agreed to sell 60 Cannon Street in London for £30.9 million (€35.3 million).
Peakside Capital, on behalf of Peakside Real Estate Fund I (PREF I), has sold a mixed-use asset in Berlin for €12 million.
Pramerica Real Estate Investors, the European arm of the real estate investment and advisory business of US-based Prudential Financial, has raised an additional £98.3 million (€112 million) in new subscriptions to the Pramerica UK Ground Lease Fund.
Pramerica Real Estate Investors, the European arm of the real estate investment and advisory business of US-based Prudential Financial, has formed a €120 million joint venture with Hagen Kahmann and Julian Brown, the founders and principals of Kauri CAB Management GmbH.
Hamburg-based Union Investment has acquired an 80 percent stake in an OPCI that owns the Géant shopping centre in Bordeaux, France, for €63 million, valuing the property at €80 million.
Universities Superannuation Scheme (USS) has purchased a UK shopping centre for £31.25 million (€35.7 million).
After seeing record deal flow and unbridled enthusiasm throughout the mid-noughts, the party ended quickly. Scars from the global financial crisis were deep and painful memories remain fresh for many. Therefore, it should come as no surprise that real estate transaction activity has been subdued over the last several years by comparison to the go-go days of easy money and extreme leverage. But as the hangover of the global financial crisis fades, real estate capital is once again flowing freely across borders.