November 3, 2017 – TH Real Estate has raised an additional €422m for its European Cities Fund from five international investors. The European diversified core, open-ended fund now comprises investors from Germany, Austria, The Netherlands, Italy, Ireland, the US and Australia. To date the fund has raised c. €1bn in equity.
Launched in March 2016, the Fund has since secured an initial portfolio comprising high-quality assets totalling€940m; with a further two deals close to completion. This portfolio offers investors direct access to €1.6bn of real estate across Europe’s most dynamic and resilient cities. This most recent capital raise provides a further€550m of total investment capacity for additional assets across the office, industrial and retail sectors.
Current holdings in the Fund include Helsinki’s premier shopping centre, Kamppi, which totals 36,600 sq m (393,959 sq ft), Xanadu Shopping Centre in Madrid alongside Intu (image attached), The Omni Centre in Edinburgh, a mixed-use scheme adjacent to the Edinburgh St James development; and the forward funding of The Cube in Berlin, a 18,500 sq m (200,000 sq ft) prime office development, well located in front of the German parliament building. Further office investments are close to completion.
Andrew Rich, European Cities Fund Manager, comments: “This additional equity is testament to investors’ confidence in both the Fund’s city-focused strategy and our ability to successfully deploy the capital, leveraging our extensive local network across Europe. Our research led strategy, underlined by a focus on long-term structural and demographic trends, resonates with investors for its ability to look beyond short-term cycles to deliver long-term growth and income.
“With close to 300 people across eight offices in Europe, our teams’ local presence, expertise and longstanding relationships with key industry professionals has given us unprecedented access to deals, helping us to secure high-quality assets across Europe. We will continue to work hard to identify the right opportunities for our investors.”
Over 200 European Cities have been processed through a proprietary filtering and scoring system, developed by TH Real Estate’s research team, to define which cities are structurally positioned to grow in value over a long-term horizon. The cities were assessed based on soft (e.g. quality of life and technology scores), hard (e.g. urbanisation and youth population) and growth (e.g. discretionary spending and population growth) factors, resulting in a defined list of cities supported by such factors and best placed to benefit from long term growth in demand for real estate. The Fund will not invest outside of these specified cities. It seeks to provide investors with diversified and defensive income return and optimise long-term total return by investing only in ‘future-proof cities’ across Europe.
The European Cities Fund sits within our ‘Resilient’ series, which is designed for investors who are focused on diversification, income and long-term capital growth. These strategies focus on investing in high-quality assets in leading cities that are well-positioned in terms of long-term structural trends, including demographic change, urbanisation and technology.