CBRE Global Investors, the real estate investment management business of global property services firm CBRE, has hit the fundraising trail for its second European value-add fund.
The firm declined to discuss capital raising matters. However, PERE understands it is targeting an equity total of as much as €1 billion for CBRE Europe Value Partners II. The maiden fund in the series closed in February 2016 with €840 million of equity from six investors.
Among the investors in that fund was The Teacher Retirement System of Texas, which said in a pension document last Thursday it had committed €89.7 million to the fund. The pension is understood to be the successor vehicle’s seed investor with further investors expected to commit capital during a fundraising period spanning the next year.
The strategy for the second fund is expected to follow that of the first, which became fully deployed in May. The firm has a relatively broad remit to invest via the series, investments including high street retail assets in Spain and logistics properties in France and the UK. Among the larger deals struck for the fund was a majority investment in a £1 billion ($1.28 billion; €1.13 billion) UK development joint venture with logistics giant Prologis, comprising more than 7.5 million square feet, in February.
The funds are expected to generate internal rates of return of approximately 15 percent and 1.5x equity multiple. Although the firm would not divulge performance numbers, the first fund is understood to be in line to exceed that target following its first two exits – for which agreements have been signed. Each of those dispositions are expected to crystalize IRRs in excess of 30 percent once completed.
CBRE GI’s Europe Value Partners was originally managed by its multi-manager and joint venture business CBRE Global Investment Partners. However, as the strategy shifted to include more direct outlays, the firm decided to position the series as an offering of the whole firm instead.