Over the past five years, 35 funds focused on real estate in Southern Europe* have reached a final close, amassing aggregate capital commitments of €14.8bn. However, with only two funds having held a final close in 2015 YTD, raising an aggregate €450mn, fundraising for Southern Europe-focused funds does not look like it will hit the heights of 2014, when six funds raised €7.5bn. While this may in part be due to the Greek crisis earlier this year, Southern Europe as a region is in recovery from a long recession, with the economies in the region facing difficulties in restructuring their industries to face Europe-wide competition.
Preqin’s Real Estate Online service currently tracks 11 funds in market that plan to have exposure to Southern Europe, targeting an aggregate €4.8bn in capital commitments. This represents 12% of the total capital targeted by Europe-focused funds in market. Southern Europe-focused private real estate funds in market follow a variety of strategies across the risk/return spectrum; 27% follow core and 27% follow value added strategies, while core-plus and opportunistic funds are being raised by 18% of funds in market each. Of the 11 funds in market, 64% will look to invest in a diversified range of property types, with a further 18% indicating an interest in niche properties, while industrial and retail properties are favoured by the remaining 18%.
*Preqin defines Southern Europe as Portugal, Spain, Andorra, Gibraltar, Italy, San Marino, Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Montenegro, Macedonia, Romania, Serbia, Slovenia, Turkey, Cyprus, Malta.