Corestate Group, the Switzerland-based private equity real estate firm, has raised an additional €40 million for its German commercial property fund.
The company said today it had held a second close for the vehicle. Though it didn’t specify the exact equity raise it is thought approximately one third of the stated additional spending power of €120 million would be in equity.
Corestate launched the fund in December 2006 and targets income-producing commercial properties in large urban areas of western Germany that display strong economic fundamentals. It focuses on small and medium-sized portfolios. The additional equity was raised from new investors, it said today, giving it total uncommitted firepower of around €160 million.
The firm said: “The Fund intends to invest in special situations, focussing on high quality assets with certain value add potential based on active asset and property management.”
Phillip Burns, newly installed chief executive officer, said in the statement: “We are very pleased to complete our latest equity raise for the German Commercial Fund for which we have seen a strong level of support from a number of new investors.”
He added secondary locations with strong tenants were “under-priced” in the German speaking countries and banks were very hesitant to provide debt for these types of assets. “As a result, Corestate is witnessing significant opportunities to acquire properties below the radar of the larger institutions.”
A third close could happen in the summer.
Corestate has already raised a Germany-focussed residential property fund. In 2008 it closed German Residential Limited on €486 million ($766 million) of equity, giving it a target investment volume of €2 billion.