Brookfield Asset Management has launched a fund to invest alongside Brookfield Strategic Real Estate Partners V in diversified European real estate opportunities, PERE has learned.
This marks the first regional sidecar for a fund in the BSREP series, and the first time the Toronto-based manager has sought to raise capital for a Europe-focused opportunistic real estate investment vehicle.
Brookfield Strategic Real Estate Partners Europe was filed with the US Securities and Exchange Commission in December 2023. No target size was disclosed. Brookfield declined to comment.
According to a market source familiar with the matter, the European vehicle is expected to reach in excess of €1 billion in size.
PERE understands the euro-denominated vehicle was established to enable European institutions that cannot invest in US dollar-denominated funds or outside of Europe to invest with Brookfield, and to also provide additional opportunities for global investors looking to augment their exposure to European real estate.
The sidecar is a fully discretionary pooled investment vehicle with a similar investment period to deploy capital as BSREP V, said the source. It is understood that each European deal executed by Brookfield’s opportunistic strategy will receive capital from both BSREP V and BSREP Europe. There is no requirement for investors in BSREP Europe to also invest in the main fund.
PERE understands BSREP V has an allocation to Europe of approximately one-third, in line with previous iterations in the BSREP series.
The perceived strength of the opportunity in European real estate was a key factor in the launch of BSREP Europe, according to the source. Indeed, data from broker CBRE shows European investment in commercial real estate in Q4 2023 increased by 22 percent on the previous quarter to total €45 billion, ending a run of seven consecutive quarterly declines in deal volume in the region.
Brookfield’s European real estate business has doubled in size since 2017 to more than $50 billion in assets today across multiple sectors and geographies, PERE understands. The firm has more than 100 real estate team members on the ground, with offices in London, Madrid and, as of November last year, Frankfurt.
Earlier this month, Brookfield’s senior leadership team said during the firm’s fourth-quarter earnings call it had raised $8 billion in the first close for BSREP V in December, and expected to hold a final close before the end of the year. The firm is believed to be targeting a raise of $15 billion for the fund, which was launched in February of last year. This makes it the largest closed-end private real estate fund currently in market, according to PERE data.
Notable commitments to BSREP V include $500 million from Japan’s Government Pension Investment Fund, $300 million from Pennsylvania Public School Employees’ Retirement System and $200 million from Minnesota State Board of Investment, according to PERE data.
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