Northam holds second close on second fund

The Toronto-based fund manager has raised C$180 million for its Northam Canadian Commercial Property Fund II, which is targeting European investors seeking Canadian real estate.

A Toronto-based real estate investment manager has held a second close on its latest fund, which is targeting European LPs seeking exposure to Canadian real estate.

Northam Realty Advisors has held a second closing of its specialized Canadian real estate fund, Northam Canadian Commercial Property Fund II, with additional capital of C$80 million (€59.76 million; $77.93 million) thanks to commitments by two German institutional investor groups. This follows its first closing of C$100 million in March 2012, bringing Fund II to a current total of C$180 million. 

Fund II, which is focused on steady income distributions, is targeting European institutional investors seeking exposure to Canada’s largest and most liquid commercial real estate markets. The core-plus vehicle offers institutional investors the opportunity to make real estate investments in Canada through the regulated and proven structure of a Luxembourg specialized fund while benefiting from the local presence of Northam’s investment team. Fund II is targeting a total of C$400 million to C$500 million in equity commitments. 

The investment strategy of the fund is focused on properties in the office, logistics and high street retail sectors. A first investment was completed in downtown Toronto in July 2012. 

Patrick Handreke, president and chief executive officer of Northam, said in a statement that Canada has strong fundamentals based on “the strength of its institutions and legal framework, supported by effective political measures as well as macroeconomic and social stability. Canada’s excellent future prospects are enhanced by its status as an energy and resource power.”

Alexander Breddermann, vice president of fund management, added: “In order to deliver consistent long-term value and stable distributions to investors, Northam strictly adheres to an investment strategy focused on portfolio diversification, excellent tenant services and long-term marketability criteria.” 

Breddermann told PERE that the firm hopes to close the fund by the end of the year, although it could continue fundraising until the second quarter of 2014. “We’ve got some good traction,” he noted. German placement agent Selinus Capital has been retained to market Fund II, as it had been with Northam’s first fund.