Austrian fund manager Europolis is planning a ¤1bn pioneering drive into the rapidly emerging property markets of eastern Europe. It will launch its E2 fund to target Russia, Ukraine, Bulgaria, Romania, Croatia, Serbia and Montenegro, Macedonia, and Bosnia-Herzogovina.
It is the first time that a vehicle has embarked on such an ambitious push so deep into the region. Austria’s Investkredit Bank and the European Bank for Reconstruction and Development, which jointly own Europolis, have made an initial ¤300m capital investment.
“This new fund has a unique regional focus and we are thinking of inviting third-party institutional investors into the vehicle next year,” said Europolis managing director Bernhard Mayer.
Investkredit’s equity contribution will be €225m while EBRD is injecting €75m. E2 will be a regional fund comprising 15 to 20 assets.
The vehicle’s leverage will be up to 75%, probably less for acquisitions and developments in Russia and Ukraine. It will acquire, develop and manage a real estate portfolio of office, logistics and retail properties in capital cities and regional centres across the countries.
“Helping to build the real estate business is an essential part of the EBRD’s work in promoting the transition of the region to full market economies,” said Ralph Kinhirt, EBRD’s operations leader for the E2 project.
Europolis’ fund E1 has been active in central Europe for several years and has also made acquisitions in Romania.
