Heitman has closed its latest real estate vehicle, Russia and Ukraine Property Partners, with a commitment from GE, marking a first foray into the territories for both investors.
Focused on “high quality” real estate projects, the vehicle aims to invest in existing and planned residential and commercial property projects in the developing regions.
Gordon Black, Heitman managing director for Europe, said, “We’re very excited to be entering the property markets of Russia and Ukraine at this important stage of their evolutions.”
The US firm has invested $5 million in the fund alongside three existing investors in previous funds, notably GE Real Estate. The vehicle has the firepower to acquire $450 million of assets with leverage over the next 12 months.
The vehicle is the latest to focus on Russia. Aberdeen Property Investors has just launched a €500 million fund. Finnish bank Evli recently launched EPI Russia I, while US firm J.E. Robert Companies raised €321 million with co- fund manager Alfa Capital Partners for the Marbleton Property Fund.
The Ukraine, with a population of 46 million compared to Russia’s 141 million has received less attention than its larger neighbor, though foreign investment into the country has been growing.
Heitman’s latest fund follows its Central Europe Property Partners, Central Europe Property Partners II, and Heitman European Property Partners III. Since 1998 Heitman has been involved in €3 billion of property transactions in Europe.
According to sources, it is currently fundraising for a pan- European industrial fund.