Cromwell Property Group (Cromwell) and Valad Europe, Cromwell’s European wholesale funds business, today announces the launch of the Cromwell European Cities Income Fund (CECIF) after securing commitments from institutional investors including PFA Pension and the acquisition of a €205 million seed portfolio comprising 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 percent and a total return of 8 percent from assets located in key selected European cities.
The fund will invest predominantly in retail and leisure, industrial, office and some specialist property sectors in the 29 locations identified by Cromwell’s research team as cities with long-term rental growth potential and strong liquidity. The fund will also leverage the group’s extensive local real estate team to secure the best institutional assets.
Comprising three prime office assets located in Amsterdam, Rotterdam and The Hague, the seed portfolio includes the 33,400 sqm Central Plaza in Rotterdam, the 8,700 sqm De Ruijterkade building in Amsterdam and the 5,700 sqm 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.
David Kirkby, CEO Europe, commented: “This is Cromwell’s first major European fund launch. The first close of CECIF demonstrates our ability to match international capital with investment opportunities underwritten by our extensive local real estate teams in 14 European countries and 22 offices.
“This is a clear signal of our intention to grow both funds under management and the geographic reach of our platform as we scale up to provide institutional investors from around the world with access to a full range of investment themes spanning core, core-plus and value-add.”
Audrey Klein, Head of Equity, Europe, commented: “The historically high yield premium of European commercial property over sovereign debt and corporate bonds currently offers an attractive entry point for institutional investors looking for a long-term total return in excess of 8 percent.
“We have researched and carefully analysed 163 European cities and selected 29 which we believe will generate sustainable, and resilient, long term returns for investors. These cities will be the future focus of the fund,” she added.
