The Amsterdam-based company is shifting from asset to fund management, with plans to expand on the existing European vehicles it runs in partnership with Middle Eastern banks
Amsterdam based Equity Estate is busy turning itself from an asset manager to a fund manager. The company, part of the Catella group, is winding down its property management activities for Swiss property firm Züblin Immobilien. It will manage Züblin’s Benelux portfolio until 2007 and at the end of the first quarter will stop managing the German property portfolio Züblin bought from Dutch fund manager VastNed in 2004. “It’s much more fun being in the driving seat,” says Equity managing director Enrico van Erkelens.
Equity was established in 1997 and manages €675m of property throughout Europe for institutional and private investors. The company already has some fund management experience. In partnership with Arab Bank, it runs the fully invested AB CPFM Europroperty Fund, which owns €125m of office and logistics assets in the Benelux countries and Germany. Equity and the bank are working on a second fund, AB CPFM Real Estate Holding, which will be similar in size but with more flexibility in terms of the sectors and countries it targets.
Equity is looking at investing in France and is seeking large retail assets. Arab bank has supplied €50m in equity for the new fund in a structure that is not Sharia-compliant, while Equity is taking a 5% stake.
With another Middle Eastern partner, Kuwait Finance House, Equity runs the €150m, Sharia-compliant Queristics Investment Sarl fund, which buys higher-yielding office, logistics and light industrial assets in the Benelux, France and Germany. Van Erkelens expects to invest €100m by autumn. Kuwait Finance House and Equity have agreed to provide €70m of equity, with a further €30m as an option. Including leverage, the portfolio can grow to €400m.
Equity’s various funds provide a good flow of deals, but Van Erkelens believes the market is overheating. “Some projects are simply too expensive,” he says. “Last year we invested a lot in two logistics tenders that we didn’t win. We’ll continue to look at tenders, but will not do so if we are third, fourth of fifth in line. We’ve also got some nice off-market deals in the pipeline.”
Recently, Equity lost investment manager Ralf Wessel to Prologis. Van Erkelens plans to fill the vacancy eventually, but for now, he and Léon Vié will handle the expansion of the company’s fund management activities.
