Private equity firm KKR & Co has raised $739 million which it will put towards its first online European real estate fund buoyed by the appetite for European property from investors.
KKR, which was co-founded by Henry Kravis and George Roberts launched its real estate platform in 2011 after property funds at Wall Street banks suffered during the financial crisis.
The company says it made a decision to build a high-quality, dedicated internal real estate investment team and as of March 31 2016, it has over 45 professionals leveraging resources throughout KKR.
According to Bloomberg, KKR’s real estate platform has committed more than $2.7 billion in equity and debt across 70 transactions in the US, Europe and Asia.
The new European platform, KKR Real Estate Partners Europe LP was raised in 15 months from investors including public pension funds, family wealth managers and individual investors.
It aims to focus on “all types of property” in Germany, the UK, France, Spain and Italy
KKR head of European real estate Guillaume Cassou says the company is interested in in Germany and is potentially interested in residential development with local partners in Madrid and Barcelona.
Bloomberg quotes Cassou as saying Italian retail and office space may be a good investment since the country is cheap relative to the rest of Europe.
“While Paris is expensive, there are opportunities in the French regions where there are higher yielding assets,” he adds
According to the Bloomberg report, KKR is however worried about the UK leaving the EU, but is prepared for either eventuality.
“If the UK does leave, the bar may be higher for UK investments because there will be more uncertainty and investors will look for better risk rewards.
“There has been a real appetite for European real estate from investors because the region is in the infancy of a recovery and pricing is still attractive relative to other areas,” Cassou is reported as saying.
“There’s still a lot of deleveraging to be done, and it’s all about selection and being creative.”