Primonial chips in €40m to Catella maiden residential fund

French investment manager Primonial REIM has committed €40m to Catella’s very first pan-European residential fund, marking the first investment in the vehicle from outside Germany, said Catella Residential Investment Management, part of Swedish group Catella.

The Berlin-based Catella’s CER III Fund held its first close only in July and is targeting at least €1bn in investments across European residential real estate markets. It was able to kick off with an investment of €50m in seed capital from a German pension fund, which has since topped that up with a further €20m. On the strength of ongoing demand for German residential assets, Catella said it expected to shortly announce further international investors in the fund.

Michael Fink, managing director of CRIM, said: ‘The CER III fund’s Luxembourg-based structure provides international investors with easy access to Catella’s residential investment platform, the largest and most geographically diverse across European markets… We anticipate that we will be able to announce further new investors alongside Primonial REIM in the near future. There is extremely strong investor demand for the fast-growing and defensive “living sector” of real estate assets in a world of very low, or negative, investment yields, particularly in fixed-income products.’

The properties being targeted by the fund are modern and affordable apartments with stable cash flow, including new developments, and also modern living market segments such as senior living, student housing and serviced apartments.

Catella said CER III has an investment pipeline of more than €250m in markets including Denmark, the Netherlands, Belgium, Germany and France. The fund has already made its first acquisition, in a block of apartments in the Valby district of Copenhagen, for €42m. Luxembourg-based alternative investment fund manager Vistra Fund Management, is managing CER III.

Casper van Grieken of CBRE Netherlands, which acted as placement agent for the CER III Fund, added: ‘With a compelling pipeline and strong ability to source attractive investments across Europe, this strength of offering has not been seen in the market for some time.’ 

CBRE EMEA Equity Placement is aiming to collect capital from European and international pension funds, insurance companies, foundations and other professional investors for the fund, with a targeted volume of €1bn and net targeted yields of 5%-6%.

Primonial REIM is one of Europe’s leading third-party real estate portfolio management companies for institutional and private investors, with around €19 bn in total assets under management.