Fundraising begins for latest fund to capitalise on credit crunch discounts
LaSalle Investment Management has started fundraising for a €5bn (£4bn) European opportunity fund.
LaSalle has secured seed capital for LaSalle European Ventures Fund III ahead of a first closing at the end of June.
It is its third European opportunity fund and follows its €1bn (£803m) LaSalle Euro Growth II fund, which sold most of its assets last summer.
LaSalle, the investment arm of Jones Lang Lasalle, follows a host of fund managers that have launched opportunity funds since the start of the credit crunch, aiming to cash in on falling values. Among the fund managers to have launched similar European-focused vehicles since last August are AAIM, the UK-based fund manager, and Apollo Real Estate Advisors, which last month launched a $5.5bn (£2.8bn) fund.
The LaSalle European Ventures Fund III is expected to dwarf that, showing the continued appetite among institutional investors and wealthy individuals for commercial property.
LaSalle was unable to divulge the details of the fund but Property Week has learned that it will be an eight-year fund with a buy period of four years, followed by a hold-and-sell period of the same length.
The gearing level of the fund will be a maximum of 75%, although debt will be arranged on a deal-by-deal basis. LaSalle will buy both standing assets and developments and aim to give its investors a gross return of around 20%.
Investors are expected to come from Europe, the Middle East, the US and Asia. Sovereign wealth funds are also expected to invest.
The fund could be weighted towards offices by as much as 70%, but it will also buy retail and industrial, as well as central and eastern European hospitality-related properties. It is targeting property with value-added and opportunistic angles in Paris, Munich, Hamburg and Stockholm, although LaSalle may widen this net to include other cities as the credit crunch spreads to less mature business locations.
LaSalle’s co-head of Europe, Simon Marrison, said: ‘We believe risk-pricing has returned to the market and the strong take-up of top-quality properties in continental Europe will continue to drive good levels of rental growth.’
The properties bought by the LaSalle European Ventures Fund III will be managed by the company’s asset management teams in Paris, Munich and Madrid.