German property group Patrizia has announced the launch of its first ever pan-European residential fund with the aim to reach a volume of €1 bn next year.
In a statement, the Augsburg-based group said that it has seeded the open-ended core investment vehicle - Patrizia Living Cities Residential Fund - with a €650 mln portfolio assembled through a series of separate transactions in Germany, Denmark and the Netherlands, including most recently the purchase of a German fully-let residential package of 1,198 apartments.
A number of existing and new global institutional investors from Europe and Asia have committed to the fund with further parties in advanced due diligence, the company added.
Anne Kavanagh, Chief Investment Officer at Patrizia, said: 'We are thrilled to have successfully launched this new flagship residential fund to capitalise on the exciting opportunities available within the European residential sector and the strength and depth of our experience in this market and our fund management capabilities. We’d like to take this opportunity to thank our investors for their early commitment which demonstrates their confidence in our team and strategy. Living Cities is already creating enormous interest among investors due to the strong growth potential in Europe’s residential sector.'
The fund, which will have a 35% LTV, will be targeting Europe’s metropolitan areas. It draws on Patrizia’s proprietary European Cities Ranking model to focus on long term buy-to-hold strategies which will include 20% of the Fund being invested into the increasingly sought after 'Living' residential category including co-living, retirement and student housing.
Sebastian Dietert, fund manager, Living Cities at Patrizia, commented: 'To have locked in a seed portfolio of €650 mln is testament to our deal making capability and our ability to secure very attractive assets for our clients. The composition of the current Living Cities portfolio reflects the essence of this fund, namely to provide stable income with a long-term capital growth prospects in strong micro locations. In addition, we have a pipeline of approximately €1.5 bn in additional acquisition targets thanks to our strong local expertise.'