BlackRock Private Markets has raised €774 million (US$844 million) in initial investor commitments for the BlackRock Europe Property Fund VI at its first close.
BlackRock said the capital had been provided by a diverse set of global institutional investors, including new clients and LPs from prior vintages as the best real estate buying opportunity since 2008 has emerged in Europe. Its last fund in the series closed at £1.1 billion in 2018.
It says European real estate markets have recently repriced more swiftly than other regions and says that, amid stabilising interest rates and inflation, its latest value-add fund plans to take advantage of an “attractive entry point”.
BlackRock says the fund will target the most liquid markets in Europe, with a focus on the UK, France, Germany, the Nordics and Spain, and will invest in “high-quality assets aligned with the structural ‘mega forces’ driving the economy and future occupier demand”.
It describes these mega forces as “demographic shifts, digital disruption and the transition to a low-carbon economy and a net zero built environment”.
Its focus will be student housing and homes, and logistics and data centres in under-supplied markets. It is an SFDR Article 8 fund and will be focused on ESG credentials, including high-energy efficiency and creating net-zero emissions.
Strategically it will focus on recapitalising, repositioning, and rebuilding assets.
To date, EFVI has already committed €289 million of equity across four investments – two logistics assets in Sweden bought from Inlog, and multi-family assets and student housing in the UK. The UK student homes scheme is understood to be The Store House, a purpose built student accommodation project in Leeds where it is working with developer Manner.
Anne Valentine Andrews, global head of real estate and infrastructure at BlackRock, said in a statement: “The European Value-Add series is a vital component of our US$28 billion global private equity real estate business. Despite continued market uncertainty, the window of opportunity is opening for real estate investors. This requires getting granular within asset classes and harnessing the structural mega forces driving future demand and requirements for real estate.”
Thomas Mueller-Borja, global CIO of value-add real estate and co-portfolio manager of EFVI, added: “Cyclical and structural factors are creating what we believe is the best real estate buying opportunity since 2008. It is crucial to remain disciplined and selective in more volatile times, and we continue to apply the research-led, principle-based investment approach which has consistently guided our decision-making over the years.”
As of September 30, 2023, BlackRock manages US$317 billion in alternative investments and commitments on behalf of clients worldwide.
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