Fidelity International, the London-based investment manager, has been awarded a $150 million mandate by NCB Capital, the investment arm of Jeddah, Saudi Arabia-based investment bank National Commercial Bank, to invest in European real estate.
Fidelity and NCB Capital have said they will target pan-European core and core plus assets across Germany, France, Benelux and the UK.
A spokesman for Fidelity said the Shariah-compliant mandate would be focused on lot sizes of around $20 million to $60 million in the office, logistics and retail sectors. The mandate, once leverage is included, will have total investment firepower of $300 million, the spokesman added.
“In the current climate, real estate has come into its own as institutions look for income and, in recent years, appetite from Middle Eastern investors has begun to increase,” said Adrian Benedict, investment director real estate at Fidelity International.
“Developing a strategy and flexible structure to meet the needs of NCB Capital’s client base has been at the heart of this project. With strong competition for core, yielding assets, our intention is to focus on opportunities with active income management potential across the key economic regions of Europe,” added Benedict.
The National Commercial Bank is the second largest bank in the Arab world with assets, as of the end of 2015, totaling $119 billion.
Fidelity’s most recent activity took place in February when it raised around €111 million for its open-ended European-focused core real estate vehicle. The firm began its latest round of fundraising in December last year, since when it had received major backing from institutional investors in France, Germany, Switzerland and Ireland. Fidelity said it would be investing in core, multi-asset real estate via the vehicle, called the Fidelity Eurozone Select Real Estate Fund, which has a capital raising target of €250 million. The fund, which is aimed exclusively at institutional investors, has achieved an annual return of 9.2 percent over the last five years, with a distribution yield of around 4 percent, the firm said.