BLG Capital has raised €152m of equity at the final close of its second opportunity fund following strong demand from US and European institutional investors.
The largest of the three initial investments by the new fund is its co-investment with Doğuş Holding in Galataport. The redevelopment of Istanbul’s longest waterfront site on the Bosphorus, and the only passenger cruise ship port, will see the addition of a prime high street shopping district, grade-A office space, the new luxury Peninsula Hotel Istanbul, and other leisure and cultural attractions.
Serdar Bilgili, BLG Capital’s Chairman, said: “This successful capital raise highlights how existing and new investors regard Turkey as an attractive long-term growth market for real estate investment, especially with the fund’s exposure to iconic projects such as Galataport. It demonstrates their confidence in our track record of completing complex redevelopments to world class standards to create significant value over the medium to long term.”
BLG Turkish Real Estate Fund II received approximately 70% of its equity commitments from US institutions with the balance mainly from Europe and the Middle East. The profile of its investors encompasses endowments, pension funds, insurance companies, foundations and fund of funds, while there was strong support from existing BLG investors who re-upped into the new fund.
Alongside the Galataport project, BLG also completed two other investments on behalf of the fund:
- VK 108 – a luxury residential high-rise development in the heart of the prime shopping district of central Istanbul.
- Bodrum – a mixed-use hotel and residential development on a prime seafront site in Turkey’s premier summer holiday resort for domestic and international tourists.
BLG Capital has established a strong pipeline of other investment opportunities for the fund. Difficulties faced by Turkey’s real estate sector have caused a pick-up in the number of distressed situations and a shortage of capital for prime development projects, which present highly attractive investment opportunities for BLG Capital’s experienced team to source, primarily in off-market transactions.
BLG TREF II continues the opportunistic investment strategy of the predecessor 2012 vintage fund, which has fully deployed the €142m of equity that it raised in six investments. Its assets include Ortakoy, Cakmakli and Florya Aparts - premium student accommodation in Istanbul operated by Republika Academic Aparts; the Palazzo Corpi, a redevelopment of the iconic former US Consulate building in Istanbul that is now operated by the Soho House members’ club and hotel group; and additional landmark transactions across Istanbul and Turkey.
Lazard acted as the global placement agent for BLG TREF II, while Macfarlanes LLP was the fund’s legal counsel.
