Orion European Real Estate Fund raised ¬396m at its first closing last month.
Fund manager Orion Capital Managers said it was on course to reach its maximum ¬500m this month. With gearing, the fund has firepower of around ¬1.5bn.
Orion has also completed four acquisitions totalling ¬130m for the fund using a facility made available by Travelers. Travelers injected $100m into the fund.
The deals include an office development at Issy les Moulineaux to the south west of Paris. It has bought a 20,000m2 building being developed by Meunier which has permission for a 16,000m2 extension.
In Lyon, the fund manager has forward-funded a 10,000m2 office building. In both cases, the areas suffer from extremely low vacancy rates.
With first closing in place, the fund is now set to do larger deals. It is keen to source out opportunities in the corporate real estate sector and privatisations. Some of the fund’s investors have agreed to co-invest on an individual basis for any major transactions.
However, the fund said it was not prepared to enter drawn out bidding processes. “We will go for single hits where people need to sell within a certain time frame. We have to ability to close on acquisitions extremely fast,” said director Aref Lahham.
Director Bruce Bossom added that Germany also looked to be an exciting market with the sector seeing major structural changes and “a number of companies are addressing their balance sheets,” he said.
The fund said it could also see opportunities in the UK to participate in the trend to take public companies private.
Orion was formed by three ex-directors of LaSalle Investment Management: Bossom, Lahham and Van Stults.
EGi News 04/03/00
