Europa signs £250m pact with UK operating partner

The European private equity real estate firm has struck up a partnership with Ediston Properties to amass more than £250m of commercial real estate in the UK.

Europa Capital, the European private equity real estate firm majority owned by New York’s Rockefeller Group, has formed a partnership with the UK’s Ediston Properties to buy £250 million-plus (€286 million; $410 million) of commercial property.

Europa’s Fund III is replacing funds managed by Schroders as the backer of the partnership, it has emerged, and the new pairing has so far bought seven office properties for £65 million and Heathfield Retail Park in Ayr, Scotland from AXA Real Estate for £32 million.

In a joint statement on the partnership, Europa and Ediston said: “The partnership is looking to invest up to an additional £150 million into the office, retail and hotel markets in the UK.” It added it was able to invest in both income and development transactions using an existing debt facility from the Royal Bank of Scotland. Royal Bank of Scotland is staying in as the lender despite the switch of investor from Schroders to Europa.

Ediston Properties is a privately owned property company based in Edinburgh and London. Founding partner Danny O’Neill set up the firm in November 2003 having previously been a senior investment director at Standard Life Investments. In 2009 and 2010 the company invested around £100 million into the UK market as well as selling its Broadway One office building to a German institutional investor for £54 million.

The formation of a partnership comes at a busy time for Europa, which traditionally invests in markets alongside local operating partners.

It recently sold for €75 million the Gasometer Phase 2 office complex in Vienna to Bank Austria Real Invest Immobilien-Kapitalanlage. Europa owned 50 percent of the asset, with the other 50 percent owner being Immofinanz. In addition, it sold the the 435-room Jan III Sobieski Hotel in Warsaw held jointly with Warimpex Finanz- und Beteiligungs AG to Wenaasgruppen, headquartered in Norway.

Recent tie-ups with local operating partners include the formation of a partnership with Sydney-based logistics real estate developer and fund manager Goodman to invest in UK development land for logistics and distribution facilities. The joint venture is targeting land already benefiting from outline planning permission on which they intend to secure pre-let leases prior to development.

By far the most significant announcement by Europa in recent times was made in October 2010 when Rockefeller Group International, the New York-based real estate investment firm, laid down a giant marker in European real estate by acquiring a majority share in the firm.

Europa Capital, led by founders Charles Graham and Noel Manns, has raised six real estate funds to date.