Cromwell Property Group has announced the launch of the Cromwell European Cities Income Fund (CECIF), after securing commitments from institutional investors to fund the acquisition of a €205 million seed portfolio of three Dutch assets.
With an initial investment target of €2 billion in gross asset value, CECIF is a long-term, open-ended core fund targeting income returns of more than 5 per cent p.a. and a total return of 8 per cent p.a. from assets located in key selected European cities.
Cromwell’s research team carefully analysed 163 European cities and selected 29, driven by a number of key macro-trends, which have the potential to generate sustainable, resilient, long-term returns for investors.
The fund will invest in office, retail, leisure, industrial and some specialist property sectors, in specific locations in each city, as identified by Cromwell’s local real estate teams.
Comprising three prime office assets located in Amsterdam, Rotterdam and The Hague, the seed portfolio includes the 33,400 square metre Central Plaza in Rotterdam, the 8,700 square metre De Ruijterkade building in Amsterdam and the 5,700 square metre Koningskade building in The Hague.
All the buildings are let on long-term leases backed by strong covenants with an average lease length of more than nine years.
“We have previously flagged our intention to grow our funds management business and have spent the last few months discussing opportunities with key investors," Cromwell CEO Paul Weightman said.
“The first close of CECIF, and the acquisition of the seed portfolio, demonstrates our ability to match international capital with investment opportunities underwritten by our on-the-ground real estate teams in 22 offices across 14 different European countries.
“We have a very strong pipeline of additional investment opportunities already identified for CECIF and look forward to announcing further milestones, as well as a number of new fund initiatives, in coming months,” Mr Weightman said.
Cromwell’s European funds management platform manages €4 billion of real estate assets and investment capacity across its 26 funds and mandates. The platform covers approximately 338 assets and 3,400 tenants, managed by local teams totalling around 190 people in 22 offices and 14 European countries.