Hines Europe is to raise €400m of equity for a new European Value Added Fund, which will be 70% allocated to offices with the remainder comprising a mix of uses such as residential and retail.
The fund’s managers will invest in buildings requiring refurbishment and active management and they are seeking net returns of around 13%. Hines managing director Jürgen Herre said: “We are focusing predominantly on western Europe – the countries where we have people on the ground, such as the UK, Italy, Spain, France and Germany.”
The lot sizes sought by the fund will differ from country to country, and will probably be higher in the UK and France and lower in Germany and Italy. “Typically they will range from €50m to €80m, but we could easily go up to €150m,” said Herre. Leveraging will be up to 60%. “We have already had our first marketing meetings with some European investors and feel confident of raising the money, as the fund fits in with investors’ needs and expectations,” added Herre.
Equity of around €400m has already been raised for Hines’ previous fund, Hines European Development Fund. The first tranche closed in December 2002, and the second closed last May. The money has been 80% committed to a variety of developments in Europe.
Hines has offices in Milan, Madrid, Barcelona, Paris, Berlin, Düsseldorf, Munich, Warsaw and London.
