Resolution Property, the London-based firm, has reportedly raised €800 million ($1.1 billion) in equity to take advantage of the downturn in real estate markets.
Investors in the vehicle called Resolution Real Estate III include Hewlett- Packard’s pension scheme, says the Financial Times. With leverage, the fund will have the capacity to acquire €4 billion of assets.
It will target cheaper assets on offer both in the UK and continental Europe. Resolution Property is run by Robert Laurence. According to reports, the first investment will be a 75 percent stake in a leisure scheme called the Printworks in Manchester.
Laurence told reporters: “To a certain extent it is a buyer’s market. But you still need to take a view on how far the market will fall and when it will return. We will be led by opportunities to add value, which is not being priced in at the moment.” It is reportedly paying £20 million less than the asking price for the Printworks, which is described as Europe’s “biggest urban entertainment venue” on its website. It boasts 20 different tenants under one roof.
Resolution is not the only one in recent times to raise capital for potential distressed situations. Earlier this month, investment bank Evans Randall said it is creating a vehicle 50/50-owned with Bank of Scotland capable of acquiring £1 billion (€1.3 billion; $1.9 billion) of real estate. The capital structure is believed to be 20 percent equity and 80 percent debt
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