The European Bank for Reconstruction & Development is kick-starting a $60m Polish real estate fund with the promise of a $10m upfront contribution.
The new investment vehicle is being set up by Boston-based fund manager, the Pioneer Group, to channel international investors’ cash into the Polish property market. Initially a private joint stock company, the fund’s shares may be listed on the Warsaw stock exchange in the future.
The Pioneer Polish Real Estate Fund will seek office, industrial, shopping centre and residential investments along with funding small development projects throughout Poland.
The EBRD has promised to contribute up to 15% of the fund’s total, provided other investors put up at least $40m.
Commenting on the rationale behind the new fund, the EBRD’s director of property Marc Mogull says: “We expect the fund’s purchases of existing assets to bring much-needed liquidity to Poland’s property markets, unlocking capital for re-investment, and attracting investors to Poland who may have been deterred by fears of illiquidity.”
The EBRD has been investing in the Warsaw real estate market for four years, supporting projects with total development costs of over $200m. The bank has already backed the Pioneer Group with a stake in a private equity fund which invests in medium-sized Polish businesses.
EGi News (MIPIM 98) 12/03/98
