The second in PGIM Real Estate’s series of European value-add funds, European Value Partners II (EVP II), has raised US$1.1bn in equity capital in its final close, including sidecar investments. PGIM Real Estate is the real estate investment and financing business of PGIM, the US$1.5 trillion global investment management business of Prudential Financial, Inc. (NYSE: PRU).
By focusing on structural trends, the fund series seeks to enhance the value of investments through active tenant management, asset repositioning or specialized operational expertise. Since the first fund in the series (EVP I) launched in 2015, PGIM Real Estate’s European value-add funds have had a disciplined focus on Europe’s largest metropolitan markets carrying out 23 transactions worth close to US$3.5 billion across the UK, Germany, France, Spain and Italy. More than 70% of these transactions were sourced off-market.
EVP I, which has strategically deployed capital in office, residential and logistics in Germany and France, is c.80% realized and on-track to significantly outperform its targeted returns.
EVP II, which is expected to be 70% deployed by the end of the year, has a strong seed portfolio, predominantly comprised of c.65% in last mile logistics and c.25% in living assets across Europe’s major markets. The logistics portfolio includes in particular developments in Paris and Berlin, and most recently a commitment to a joint venture in Spain specifically dedicated to last mile logistics. The team also has plans to deploy capital in the UK logistics sector, through a joint venture opportunity with an established property company. The fund has also been active in UK senior housing with a focus on high-end developments in the affluent Greater London sub-markets and in French residential where it has committed to deliver over €200m worth of new affordable homes.
The senior portfolio management team of the EVP series of funds includes Raimondo Amabile, Head of Europe and Latin America, Sebastiano Ferrante, Deputy Head of Europe, and Nabil Mabed, Head of France, Spain & Portugal. In addition to his recently expanded role as Global CIO of PGIM Real Estate, Amabile will remain a senior portfolio manager for the EVP fund series and continue to guide the investment strategy, allocation and deployment, as well as working with the team to identify new opportunities and manage risk across our European platform.
Raimondo Amabile comments; “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. This successful fund raise demonstrates continued investor confidence in our strategy and European platform. Importantly, this capital raise also shows that investors see a significant opportunity in the region’s recovery from the COVID-19 pandemic. We will continue to source compelling investment opportunities for our investors with a focus on affordable and senior living, logistics and offices in ‘smart cities’, with the aim of creating significant value through tailor-made asset management.”