Deals

Morley raises €200m for CEE industrial fund

The fund closing by Europe’s largest property fund manager comes as research shows €95 billion was invested in European property in the first half of 2006.

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Morley Fund Management, Europe’s largest property fund manager, has closed its Central European Industrial Fund (CEIF) on €200 million ($257 million), surpassing its fundraising target by 25 percent.

News from the fund, which is owned by Aviva, Britain’s biggest general insurance company, comes as research shows investment in Europe is reaching record proportions.

Global property advisor Jones Lang LaSalle said investment in the first six months of the year rose to €95 billion, a 30 percent increase over 2005.

Ben Stirling, fund manager and head of Morley’s European property team, said: “Return prospects have started to look more favorable in continental Europe than the UK.”

Morley launched CEIF, targeting multi-let industrial properties, in August 2005 in a joint venture with London-listed property company Teesland Iog.

It said at the time that it wanted to raise €160 million and invest in €400 million worth of properties. With €200 million of equity, Morley will now be able to acquire up to €500 million of assets including leverage.

According to the firm, the new fund was 50 percent oversubscribed in terms of the number of investors. The final closing involved nine institutions including Dutch pension funds PGGM and TKP, as well as Schroders, Henderson and ING. So far the fund has invested €140 million in 13 estates in Poland, Hungary, Czech Republic and Romania.

Across Europe, investment firms such as Morley are boosting the levels of cross-border investment as a proportion of total volumes. For example, Germany’s share of transactions rose from 13 percent in 2005 to over a fifth of all deals in the first half of 2006, but the UK is still the biggest market, according to Jones Lang LaSalle.

Unlisted third-party managed funds were the most prominent type of purchaser, responsible for 43 percent. The next most prominent type was the listed sector (19 percent) followed by private individuals or syndicates, the vast majority British or Irish (15 percent). Institutions had a relatively low share at 11 percent.