Chicago-based Heitman has completed the first closing of its Heitman Europe Property Partners III Fund (HEPP III), having raised €175m.
HEPP III aims to buy office, warehouse, residential and retail property in Poland, Hungary, the Czech Republic, Slovakia, Slovenia, the Baltic states, Romania and Bulgaria.
Managing director of international equity Chris Merrill said: “We may have a second closing at €350m. With gearing of 65% to 75%, we will have a total buying power of €1bn.”
Heitman’s previous funds were chiefly focused on central Europe, but the latest vehicle has a broader remit, taking in EU accession countries. Merrill said the fund will seek “value-added” returns, although they may be “slightly lower than for the first two funds, reflecting where the market is today”.
HEPP III will be structured as a Luxembourg-based FCP and will have a life of around 10 years. Both established and new clients of Heitman have contributed to the fund, including European pension funds and insurance companies.
Once invested, HEPP III will bring the company’s total European assets under management to around €2.1bn.
“Given our strong relationships in the market we have already identified a solid pipeline of investment opportunities for HEPP III,” said Merrill.
Heitman was an early entrant into the central European property market, making its first purchases in the mid 1990s, and is a major investor in the region, with a European team of 40 and offices in London, Warsaw, Frankfurt and Luxembourg.
