PGIM raises €457m for Euro value-add fund – Exclusive

The real estate investment business of PGIM, the global investment management business of Prudential Financial, said it garnered the capital from a range of global institutional and high net worth investors. 

PGIM Real Estate has amassed €457 million in capital commitments for its debut European value-add fund.

The Madison, New Jersey-based firm said the investment vehicle, European Value Partners (EVP), will focus on office, residential, retail and industrial assets in Germany, France, Italy and Spain, and will seek to enhance the value of its investments through active tenant management, asset repositioning or specialized operational expertise.

The firm did not disclose the original target size for the fund but did reveal that the capital was garnered from institutional and high net worth investors from around the world, including one western European bank. The firm also said it began fundraising for EVP in early 2015 and closed the fund in July.

“Continental Europe offers a compelling mix of value-add real estate opportunities resulting from market dislocation, a cyclical recovery and ongoing structural trends in the region,” said Raimondo Amabile (pictured), head of Europe for PGIM Real Estate and senior portfolio manager for EVP.

“We appreciate our clients’ confidence in our ability to capitalize on these compelling market conditions to meet their investment objectives, as demonstrated by the strong participation from new and existing investors,” he added.

PGIM Real Estate has already made a number of transactions on behalf of EVP. In July the firm sold its first asset, 41 rue Ybry, an office property in the Neuilly-sur-Seine office submarket of Paris. The 155,000 square foot property was acquired vacant in July 2015 in an off-market transaction and then was fully pre-let to French cosmetics company Sephora. Other assets acquired on behalf of EVP, which is currently 25 percent invested, include a portfolio of 26 properties located across western Germany and a portfolio of three office buildings located in well-established Munich office submarkets. The firm did not disclose the price for any of the transactions.

“Our strong ability and presence in key markets to source and execute real estate transactions with strong value creation potential is evidenced by the sale of 41 rue Ybry,” said Amabile. “We will continue to source compelling investment opportunities for our investors with the aim of creating significant value through tailor-made asset management.”

In one of its most recent deals, in August, PGIM Real Estate acquired a 40 percent stake in a class A Midtown skyscraper in New York for $480 million. The firm bought the minority interest in Eleven Madison Avenue from real estate investment trust SL Green in a transaction which valued the 29-storey building at $2.6 billion.

In May, Eric Adler, PGIM Real Estate’s chief executive officer, announced that the firm had rebranded and was adopting a single name. The move brought to an end a decade of operating under two different brands, Pramerica Real Estate Investors and Prudential Real Estate Investors.