M7 Real Estate raises first capital for ‘test run’ fund

The London-based real estate investment firm exceeded its initial fundraising target by 60 percent, and plans to launch another, much larger fund next year.

London-based real estate investment and asset management firm M7 Real Estate has raised £16.1 million (€20.45 million; $25.16 million) in equity for its first real estate investment fund. The fundraising exceeds the firm’s initial target by over 60 percent, according to a company statement.

The equity for Real Estate Investment Partners II fund (REIP II) was raised from high-net-worth investors. With the inclusion of debt finance, the firm is targeting investments totaling £35 million.

A major part of the capital has already been deployed, with the acquisition of 11 real estate assets in England for 25.7 million. 

Although the amount of capital raised by M7 was relatively small, the fundraising is significant because the firm previously was primarily an advisory business but recently instigated a transition to include real estate investment management services within its offer.

“This is a test run of our ambitions to establish M7 as a third-party investment manager,” Richard Croft, the firm’s chief executive officer said in a statement. “Until now, we have invested our own capital and worked in joint venture partnerships, so this is a natural progression for the company as a fully-fledged operating partner in our specialist high-yielding multi-let property sector.”

He further added that the firm has plans of raising a much larger discretionary fund next year.

The portfolio of assets acquired through REIP II include industrial, office and retail properties spread over a total area of 460,000 square feet. The properties are located in the Midlands, northwest and northeast of England. 

Launched in 2009, M7 specializes in multi-let light industrial properties and manages a portfolio of over 300 assets spread over a total of 20.45 million square feet. It has established joint venture partnerships with Oaktree Capital Management, Starwood Capital and M&G Investments, among other investment managers. Last year, it entered into a joint venture partnership with Starwood Capital and formed a new division called MStar, which focuses on acquiring assets in the UK. 

In November, the firm opened an office in Paris – its first in France – to further expand its European real estate platform. It then appointed the former Patrizia and DTZ executive Chris Pope as managing director of the new operations there.