Internos, the €3.9bn (£2.98bn) European investment manager, is targeting €750m of acquisitions in 2015, having invested more than €300m for its new funds and disposed of €900m of assets during 2014.
Building on the momentum of last year, Internos will invest in predominantly income producing assets in the hotel, German retail and German care home sectors, as well as expand investment activity into the UK and Dutch institutional residential property sectors, and the mainstream European commercial markets. It will also continue to dispose of assets from funds where it has a mandate to recover value on behalf of investors.
Having completed €330m of acquisitions across five funds in 2014, Internos is looking to take advantage of specific opportunities in the European real estate market.
In the hotel sector, Internos is targeting a further €225m of investments for Hotel Fund 1 and its Hotel value add mandate, which will bring hotel assets to €700m and add to the twelve hotels acquired since 2012. In the German care homes sector, it has raised €80m of equity for Internos Care Invest Fund 1 and currently has €50m of assets under offer. Also in Germany, Internos will pursue further opportunities on behalf of SH-Immo, a fund management mandate with a German Pensionskasse, which acquired two office assets in Cologne, and it will invest a further €100m in German retail parks for Internos Novapierre Allemagne, its joint venture with Paref Gestion.
During 2014, Internos raised debt financing for assets with a value of more than €200m at attractive fixed interest rates typically below 2% which had the effect of enhancing income returns in its new funds. In addition, the group re-financed or prolonged existing debt with a value of €500m.
In parallel with its new acquisitions in 2014, Internos continued to execute its turn-around strategy for funds where it has a mandate to recover value for investors through a combination of intensive asset management and timely disposals. The majority of disposals were in Germany and the Netherlands, where funds managed by Internos sold some €560m comprising mainly light-industrial and retail park assets. In the UK, Internos, in its role as investment manager to the Local Shopping REIT sold a sub-portfolio of high street retail and residential assets for £80m to Varde. In southern Europe, Internos sold two shopping centres in Spain for €90m to KKR and a further shopping centre in Italy for €48m to Benson Elliot. In France, the Internos Paris team sold over €110m of assets, the majority central Paris and regional office assets, but also including some logistics assets from the Internos Spezialfonds series, which were acquired from Commerzreal in 2013.
Andrew Thornton, chief executive of Internos Global investors, said: “A combination of strong capital flows into Europe and a focus on executing asset management initiatives enabled us to deliver the strategies agreed with our investors in 2014. We also activated several mandates investing in opportunities in specific sectors of the German market and southern Europe. In 2015, we will continue to invest on behalf of our active funds, exploiting prevailing low interest rates to enhance income returns, while we explore opportunities for institutional investors in those European markets where we have strong conviction.”