CORESTATE Group has announced the second closing of a new equity raise on behalf of its German Commercial Fund LP, securing additional investment capacity of circa 120 million.
Launched in December 2006, the fund primarily invests in income producing commercial properties in large urban areas of western Germany which display strong economic fundamentals, focusing on small-to-medium sized portfolios. The additional equity was raised from new investors. Following this, the current uncommitted firepower of the fund is approximately 160 million.
The fund intends to invest in special situations, focusing on high quality assets with certain value add potential based on active asset and property management, as illustrated by its recent Hanover acquisition. In addition, the fund is targeting selected retail opportunities in Germany, Austria and Switzerland.
Phillip Burns CEO of CORESTATE, said: "We are very pleased to complete our latest equity raise for the German Commercial Fund for which we have seen a strong level of support from a number of new investors. Capitalizing on our strength in active asset management, investors have shown an increasing understanding of the necessity to deliver value-add in order to deliver attractive returns.
"Secondary locations with strong tenants are under-priced in the German-speaking countries and banks are very hesitant to provide debt for these types of assets. As a result, CORESTATE is witnessing significant opportunities to acquire properties below the radar of the larger institutions. We anticipate a third closing of this fund in summer 2011."