BNP Paribas REIM has raised almost €300 mln for its third pan-European office investment fund NEIF III, fund advisor Laurent Boissin told PropertyEU.
The third fund in the NEIF (Next Estate Income Fund) series will be slightly bigger than its predecessors with a targeted volume of €1 bn including 40% leverage, he added.
The new fund has already secured three transactions in Germany and recently signed a deal for an office asset in Paris. Like its predecessors, NEIF III offers diversification in the Eurozone office sector with an estimated distribution level of 4% p.a. This is somewhat lower than the 5% distribution forecast for NEIF II. The difference due to the fact that prices for core offices have increased significantly in the targeted Eurozone markets in the last few years.
In the past BNPPRE’s series of NEIF funds have targeted institutional investors, in particular insurers and pension funds, from Eurozone countries including France, Germany, Italy, Spain and the Benelux. The latest fund will endeavour to broaden its scope in terms of geography, Boissin said. ‘We have a lot of repeat investors but are also trying to attract new ones. We may even offer allocations to non-European investors, possibly from Asia.’
Allocations start from €20 mln.
BNP Paribas REIM announced earlier this week that its second fund NEIF II is now fully deployed following the acquisition of the 'Gaurico' office in Rome from a private Italian family for an undisclosed price. The multi-tenant office complex was acquired in an off-market transaction for a yield believed to be around 5%.
The acquisition of Gaurico marks the 12th transaction on behalf of NEIF II and the fund volume stands now at around €850 mln, Boissin said. ‘About two thirds of the assets are located in Germany and France, with the remainder located in Luxembourg, Ireland, Austria and Italy.’
The fund manager previously acquired assets in Dusseldorf, Munich and Frankfurt where yields are significantly lower than in Rome at less than 4%. ‘Yields in Germany are very competitive,’ Boissin conceded. ‘Our latest transaction in Rome – our first in this city - offers a good level of diversification,’ he added.
Rome is one of the cities targeted by NEIF III, he added. 'Any investment opportunity in Rome in line with the fund strategy will be considered.'
NEIF II has three assets in Italy including Gaurico in Rome and two assets in Milan. In France, the fund has assets in Paris and Lyon.