German fund manager Commerz Real Group's KVG fund management arm has announced the launch of a €500 mln European student housing vehicle known as Commerz Real Institutional Smart Living Europe Fund.
The vehicle, which is structured as an open-ended special AIF (alternative investment fund), aims to raise some €250 mln of capital from professional and semi-professional investors to build up a €500 mln diversified portfolio of ten to 15 residential complexes in university cities and towns throughout Europe. The fund will seek to deliver a BVI return of 5% per annum.
'The European market offers a broader range of attractive investment opportunities and allows for an even better risk spread, compared to a German-focused investment strategy,' Johannes Anschott, the Commerz Real board member responsible for institutional business, told PropertyEU, commenting on the fund launch.
'Increasing numbers of students, the flexibilisation of the labour market and the rise in the number of single households are driving demand for micro-apartments across Europe,' continued Anschott.
Commerz Real launched its first student housing fund focused on Germany in late 2016. The vehicle - Commerz Real Institutional Smart Living Fund - raised equity capital of nearly €150 mln.
'With the expansion to Europe we intend to offer our German professional and semi-professional investors the possibility to profit from the European outlook for this asset class, and in doing so to utilise our specialist know-how,' added Anschott. 'In the medium term we see considerable potential for an independent product class within our institutional portfolio.'
The reference currency for the fund is the euro; in case of transactions in other currencies the vehicle will use currency hedging of 90%.