Evans Randall, the UK investment banking and private equity group, has concluded a €1 billion ($1.5 billion), 50/50 joint venture with the Bank of Scotland to further expand its Luxembourg-based European Property Fund.
The vehicle currently owns three properties: the building known as The Rock at South Axis, Amsterdam; the Telekom Centre Munich and the newly completed 70,000-square-meter Covent Garden office complex in Brussels.
Evans Randall and Bank of Scotland said in a statement they intended to acquire further commercial property assets in Western Europe before the European Property Fund is fully invested with a target a value of €1 billion. The duo expect IRRs of up to 20 percent.
As well as subscribing for 50 percent of the equity in the fund, Bank of Scotland will provide senior and junior debt funding. The vehicle will also be allowed to raise debt for specific properties from other parties.
Paul Kendrick, managing director of Evans Randall, said: “The joint venture demonstrates that despite difficult conditions in the credit markets, funding remains available for the right investments.”
Evans Randall added it was upbeat about the continued existence of opportunities in both the UK and European markets.
“The present market is offering some interesting opportunities to acquire such assets at attractive prices,” said Kent Gardner, managing director at Evans Randall. “We are seeking to benefit from this situation, notably with the establishment of this European Property Fund and the recent formation of a UK opportunity fund which has been acquiring assets in Central London,” he added.