The European Bank for Reconstruction Development has proposed to invest €75 million in Chicago-based Heitman’s fourth value added fund, Heitman European Property Partners IV.
The investment by the bank, which targets projects in Central and Eastern Europe and Asia, was approved at the concept stage and is pending a final review to be held in a board meeting on 28 July.
An investment would go some way to enabling Heitman to reach its equity raising target of €600 million by final close in September. In March, the fund manager held an initial close of €380 million for the vehicle, which is to target both standing and development schemes in central Europe as well as in Russia and Ukraine.
In a proposal document by the EBRD, the bank said: “The [Heitman] fund will add crucial liquidity to the property market in its target region, creating buyer demand. Since the beginning of the current financial and economic crisis no notable property investment transactions have occurred; investors are still establishing a view on market stabilisation and future prospects. “
“With the volume of capital the Fund has at its disposal and Heitman's in-depth knowledge of the market, the sponsor has the potential to play a catalyst role to re-open the acquisition and development market in the bank's countries of operation, and in doing so creating a strong counter-action against the credit crisis.”
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