European investor and asset manager M7 Real Estate has received investor commitments totalling over €80 mln at the first close of its latest European investment fund, M7 European Real Estate Investment Partners III.
European investor and asset manager M7 Real Estate has received investor commitments totalling over €80 mln at the first close of its latest European investment fund, M7 European Real Estate Investment Partners III.
It marks the largest fund close that M7 has achieved as a business to date. Simultaneously, M7 has exchanged contracts on €130 mln of acquisitions for the fund in four separate transactions, consisting of three portfolios and a single asset.
M7 EREIP III has a value add-led strategy and is targeting assets that offer both sustainable income streams and asset management opportunities in the retail, office and the multi-let industrial sectors in both Germany and the Netherlands.
The four acquisitions comprise 21 assets with the combined portfolio providing an initial income of €13.2 mln from 143 tenants. In line with the fund’s strategy, the 21% vacancy rate provides a significant opportunity to drive income through lettings, while there are also some modest development opportunities.
The assets include six multi-let offices totalling 21,300 m2 of rentable space in secondary cities in Germany - Bonn, Dortmund, Duisburg, Hannover, Kassel and Koblenz, with a weighted average unexpired lease term of 5.4 years. Within this sub-portfolio, the primary tenant is insurance company HUK Coburg, which accounts for 70% of the income across the German offices.
The remaining 15 assets are located in cities across the Netherlands, including Rotterdam, Delft, Arnhem and Assen and comprise 11 offices and four retail properties.
'As our largest to date, this fund raise from institutional and family office investors is another milestone in the continued expansion of our business,' said Richard Croft, M7’s Chief Executive.
He added: 'We are intending to have a second close during the first half of this year and are targeting a gross investment capability of €330 mln for the fund. We have already identified and/or are under offer on a number of other transactions and we intend to be fully invested by end Q2 2016.'