EXPO 2013: Valad Europe’s European Diversified Fund has amassed £150m (€180m) of equity in its first close.
The fund, which has capacity for £375m (€450m), will invest in core plus/value-add assets in the UK and Germany.
The fund will target office, retail and industrial distribution warehouse/smaller logistics assets let to tenants with strong credit and non-institutional remaining lease terms. Target lot sizes are €6m to €24m.
The fund will also invest in small to medium-sized portfolios.
Leverage of between 50% to 65% with strong cash-on-cash yields will be employed and Valad said that equity had been provided by several large international investors including a new investor partner. Debt financing will be sourced from a pool of lenders with which Valad Europe has existing relationships.
The fund has so far acquired a 2,438 m2 retail warehouse near Liverpool in the UK and has exchanged contracts to acquire an office asset in the UK’s South East.
It has also secured a German logistics portfolio and a retail asset in Frankfurt.
David Kirkby, Valad Europe’s chief investment officer, said: “We envisage a narrowing of the prime-secondary spreads during the fund’s life both in the UK and German real estate markets and our local teams are seeking to purchase good-value, high-quality, and leasable assets with strong covenants.”
