German institutional investors have funded the first pan-European property strategy launched by BMO Global Asset Management, the North American firm which bought London’s F&C Asset Management in 2014.
The strategy, which was designed for German investors with high requirements for value retention, is launched through BMO Real Estate Partners (BMO REP), which is the former F&C Reit Asset Management business.
The German investors have committed €150 million to the strategy, which seeks €350 million in total equity, before borrowing a similar sum.
The strategy aims to return 4% per year over 10 years of its life and it will invest in retail properties and shopping arcades in prime high-street locations of European cities. Once fully invested, the portfolio will consist of six to 12 properties. One property in Paris has been secured and final negotiations for other assets are underway.
The strategy is managed by Ian Kelley, fund director Europe, BMO REP based in Paris.
“Premises within prime high streets of European cities, particularly economic centres that are also attractive tourist destinations, are highly sought after by international retail brands. As eligible properties are in extremely short supply, this has resulted in high rents that continue to go up at lease-end,” says Kelley.
BMO REP had £6.9 billion (€9.6 billion) of assets under management at June 30.
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