UK-based private equity firm EMAC Capital has joined with international real estate investor Osprey Asset Strategies to launch a new firm focused on opportunities in Southeastern Europe and the Caucasus.
The new firm, called Castle European Estates, has opened its head office in Edinburgh and is currently in the process of raising funds from institutional investors in the UK, Europe and the Middle East.
The 50-50 joint venture was set up by EMAC founding director David Stewart Howitt, a regional specialist who has spent 12 years as a political and economic adviser in Eastern Europe, and Osprey founder Robbie Morrison, a real estate financier with more than 15 years banking and fund management experience.
Castle European’s investment strategy will focus on two core areas. First, it will invest in roll-up strategies through which it will build and manage portfolios of stabilized real estate assets for onward sale to institutional investors. Second, it will invest in individual real estate assets which present opportunities for development or refurbishment and can then be exited via a trade sale.
The initial focus will be on commercial real estate in Serbia, Croatia, Bulgaria, Romania, Ukraine and Georgia, where Castle European has an established network of offices.
Castle has a number of partnerships already in place including with RMJM, an international firm of architects, and other local and international development firms.
Southeastern Europe and the Southern Caucasus are experiencing domestically driven growth trends, largely due to EU convergence and increasing investment from countries such as Russia, the Middle East and Central Asia. Because of this there has been growth of the real estate sector in cities throughout, while at the same time there is a disconnect between supply and demand.
As well as Edinburgh, Castle European will have offices and representatives in London, Ljubljana (Slovenia), Zagreb (Croatia), Novi Sad (Serbia), Tbilisi (Georgia) and Jersey. The new firm expects to announce its first investment before the end the year.