French real estate asset manager Primonial Group has launched European Social Infrastructure (ESI), a pan-European open-ended real estate fund dedicated to social infrastructure, including healthcare, educational facilities and affordable housing.
The fund aims to have €1bn in assets under management by 2022 with a return of 5%, and already has €450m invested or in the process of being invested.
The fund is being set up jointly with its local German partner AviaRent Invest.
Primonial said the ESI fund’s portfolio already consists of 23 healthcare real estate assets in Germany and Austria with a value of €293m. It also has a €140m pipeline of two healthcare real estate portfolios in France and the Netherlands which it expects to acquire by September this year. The fund expects to manage €1bn of assets by 2022, the manager said.
According to Laurent Fléchet, chief operating officer in charge of real estate at Primonial, “This launch is testament to Primonial’s capacity to generate synergies between the group’s various real estate entities and offer our clients a comprehensive solution on the back of our robust and integrated European network. I welcome the creation of ESI, a pan-European real estate fund positioned on social infrastructure: real estate health, education and residential, asset classes resilient, on which we have recognized expertise for several years,”
The fund will invest across Europe in regions with solid fundamentals, with a focus on Northern Europe, which will account for 80% of its target allocation.
Primonial said the healthcare compartment will secure recurring income thanks to long-term leases signed with healthcare firms (operating nationally or Europe-wide), while the educational and housing compartments will potentially offer capital growth by selecting locations with attractive fundamentals in terms of demographic trends, rental demand and prices or rents.
“ESI includes top-quality assets in geographic locations boasting solid fundamentals,” said AviaRent managing director of relationship management, Hannes Ressel. “We will maintain this very selective approach in regard to all future investments.”
Back in April, AviaRent had invested €185m for a portfolio of twelve nursing homes and assisted living properties in Germany, bought on behalf of the European Social Infrastructure I (ESI I) fund launched with Primonial.
The properties, built between 1906 and 2001, comprise 958 rooms with more than 1,400 inpatient care places and 140 assisted living units.
Four of the twelve properties are located in Lower Saxony, three in Rhineland-Palatinate and two in Baden-Württemberg. One facility is also located in each of Saxony, North Rhine-Westphalia and Bavaria.
Sascia Hauke, head of acquisition at AviaRent Invest, said: ‘The undersupply of care places in Germany is attracting more and more attention, and the provision of care facilities continues to fall far short of the minimum required. Against this backdrop, we are planning to acquire further facilities across Germany, including a number of facilities across Europe for our ESI I fund.’
