UK institutions are finally making a concerted effort to pursue Continental European investment strategies
UK institution Royal Bank of Scotland (RBS) is understood to be planning to spend up to £1bn on a European property investment drive.
The institution is setting up a fund, comprising £1bn of equity and debt, which will invest in Switzerland and all EU countries except the UK. It will target offices, retail, industrial, residential and hotels.
The fund will work alongside local partners for each deal.
While not expected to be an opportunity fund, RBS is expected to aim for returns in excess of those normally required by UK institutions.
RBS’s fund is further evidence that UK institutions are finally breaking out of Britain. Standard Life has been an exception. It has been active in Continental Europe for five years, investing mainly in Paris, Brussels and most recently Spain.
Equitable Life has also recently stepped up its investments in Europe but has chosen the indirect route.
It is an investor in ProLogis’s European Properties Fund, Pradera’s European retail fund – run by former Grantchester man Paul Wight – and the Schroder European Property Fund.
In total, Equitable has around €200m invested in Continental Europe and is looking to increase this to between €300m and €350m
Scottish Widows is also understood to be considering a Continental European investment push.
Last year it bought a 9,435m2 light industrial and office development in Carrières-sur-Seine to the west of Paris. Prudential confirmed earlier this year that it has been researching the Continental European market.
The Pru has also looked at the Asia-Pacific region in the past few years, but has not driven its investment eastwards.
RBS refused to comment.
