Insight Investment today announces the first stage in its planned expansion of its property business into Europe with the launch of a pan-European property investment fund. The Insight European Real Estate Trust (IERET) has an initial target size of 600 million and will acquire commercial real estate in western Continental European markets. It is expected that it will be open to external investors in 18 months' time, once the critical size and investments have been achieved.
Execution of this first stage of Insight's ambitious plans to grow its property business in Europe illustrates the competitive benefit resulting from a supportive and financially robust shareholder. Initial pre-funding for IERET is being provided by HBOS.
The IERET is a closed-ended tax efficient structure incorporated in Luxembourg. It has an income and growth investment philosophy, targeting out-performance of local property markets with an active style of management. Tony Smedley, who joins Insight from Fountain Capital Partners, having previously led some of Jones Lang LaSalle's investment teams in Europe, will run the portfolio and acquisition programme day-to-day. Smedley will work closely with Chris Ludlam, director of property fund development and Duncan Owen, managing director of the property team to acquire and manage the assets.
The IERET is currently close to acquiring substantial new portfolios and other assets. The first acquisition made is a 21,350 m² logistics warehouse near Madrid on the A2 motorway. The warehouse is a prime asset and was secured after a competitive process.
Outlining the approach for Insight's first pan-European property fund, Duncan Owen said: "Expansion into the European markets is a natural progression for Insight given our strong position in the real estate market. This is the beginning of our development into the continental European region and we plan further expansion over the next 12 months. We have assembled an experienced and well-respected team and, with an aggressive acquisition profile, are now ready and able to move quickly in these markets. This is clear evidence of the powerful competitive strength we achieve by being part of the HBOS Group who are supporting the expansion across borders of one of Insight's core investment management skills.
"This new Fund will initially target acquisitions in the major western continental European markets including a special focus on France, Belgium, Spain and Germany. These are countries that in our view, offer the most attractive opportunities, diversification and where we have most experience. Over time, we will broaden our reach to include the other main developed European commercial property markets of Netherlands, Italy and possibly Portugal. Our strategy will be to acquire properties with fundamentally strong characteristics good assets in good locations but with opportunities to improve growth with active management. We intend to build a well-diversified portfolio both by sector and geography with a broad cross section of tenants generating above average yield in our first 'core plus' European vehicle."
Source: Insight Investment