Peakside Capital, the independent, owner-operated real estate investment manager, has raised c. €110m of equity for its third fund, Peakside Real Estate Fund III (PREF III). This has been achieved five months after the initial closing of PREF III and represents almost 75% of the €150m total equity raising target which will provide over €500m of investment firepower plus co-investment.
In response to high level of investor demand, PREF III will continue the strategy of its predecessor funds, targeting opportunistic, value-add investments in strong locations across Germany’s top seven cities and regional hubs.
PREF III aims to acquire distressed or poorly managed assets in good or evolving micro-locations at attractive entry points. Peakside Capital has acquired and managed over €3bln of gross assets since the company’s formation in 2010, will transform the properties by redeveloping, revitalising and repositioning them into core assets before disposal, taking advantage of pricing gaps between the core and non-core real estate. A nationwide office portfolio comprising 14 assets has already been acquired for PREF III.
The successful capital raising follows shortly after the full deployment of funds from within PREF II, which were committed within 18 months and invested in a total aggregated project volume of more than €600m, including co-investment, like the acquisition of “Frankfurt Airport Center I” (“FAC I”) with Madison Realty. PREF II’s returns are now projected to substantially exceed its target returns of 20% p.a.
Boris Schran, the founding partner of Peakside Capital, commented:" Germany continues to be very attractive to investors so long as they have access to local knowledge and a proven track record of delivery, all of which are served by the team at Peakside Capital. The country’s key urban centres offer rich potential for investment, backed by key commercial, social and demographic qualities. This is where we can apply our approach of “buying right, fixing well and selling right” which remains at the heart of our opportunistic investment strategy.”
Stefan Aumann, the founding partner of Peakside Capital, added:“Having already surpassed the €100m mark, we are now well on the way to achieving our €150m fund target for PREF III, driven by very strong levels of investor demand. Our clear and targeted investment strategy for the fund combined with our proven historic performance make for a compelling investment case. As a result, we have attracted new and existing clients with capital from domestic and international investors, from family offices through to major institutions."
