(LONDON) – Hines, the global real estate firm, has raised over €900 million of equity from institutional investors at the first closing of its new value-add fund, Hines European Value Fund 3 (HEVF 3).
A group of 15 investors, predominantly existing investors in the successful series, joined this first closing in which their subscriptions amount to c.60% of the € 1.5 billion targeted equity commitments Hines is seeking for HEVF 3. Further closings are expected through 2022, and into early 2023 as required. Hines expects the European investor group in this first closing to be joined by new and existing US, Asian and Middle Eastern partners in subsequent closings.
HEVF 3 is targeted to be the largest fund in the HEVF series to date, following its predecessor 2018 and 2020 vintage funds in the series. It will complement Hines’ other flagship European funds, the open-ended core-plus Hines European Property Partners (HEPP) and Hines European Core Fund (HECF).
HEVF 3 will once again build from the consistent principles of the series: high conviction thematic investment into tactical opportunities for value creation, supported by fundamental trends and capital markets inefficiencies. Hines focuses on applying its in-house real estate skillset to actively create value at the asset level, in strong locations within Europe’s primary institutional markets. It will diversify across markets, sector, and risk profiles. The fund has already secured control of two separate deals in the logistics and residential sectors.
Alex Knapp, CIO – Europe at Hines, added: “To attract this level of capital to our third value-add fund despite market uncertainty and cloudy macroeconomic conditions is a testament to the strength of our team. It means we have raised c. €2bn in discretionary equity in the first half of 2022 across our suite of European flagship funds. Our Hines European Core Fund (HECF) has secured equity commitments of c.€300m, our recently launched core-plus fund – Hines European Property Partners (HEPP) - raised c.€800m at first close, and this, our Hines European Value Fund 3 (HEVF 3) rounds off a highly successful few months for our investment management platform in Europe.”
Paul White, fund manager for the HEVF Series, said: “The last two years have changed what real estate stock is needed; where; and with what characteristics. For a value-add fund with an active strategy like ours, disruption is opportunity. We’re intending to take conviction positions on the best value opportunities in Europe, wherever they migrate to in the current more volatile context. Our local teams act as our antennae, ready to respond in real-time and faster than lagging capital markets to both accelerated obsolescence and surging demand. Most importantly, we will pursue market-leading ESG aspirations at the heart of every investment.”
Hines is a privately owned global real estate investment firm founded in 1957 with a presence in 285 cities in 28 countries. Hines oversees investment assets under management valued at approximately $90.3 billion¹. In addition, Hines provides third-party property-level services to 373 properties totaling 114.2 million square feet. Historically, Hines has developed, redeveloped or acquired approximately 1,530 properties, totaling over 511 million square feet. The firm currently has more than 198 developments currently underway around the world. With extensive experience in investments across the risk spectrum and all property types, and a foundational commitment to ESG, Hines is one of the largest and most-respected real estate organizations in the world.
Since entering Europe in 1991, Hines has grown its European platform to include offices in 17 cities as well as a presence in 60 cities in 14 countries. Hines oversees investment assets under management valued at approximately €24.5 billion and provides third-party property-level services totaling 4.3 million square meters in Europe.
Visit www.hines.com for more information.
1. Includes both the global Hines organization as well as RIA AUM as of 31 December 2021.
About the Hines European Value Fund (HEVF 1)
HEVF 1 was the first fund in the HEVF series, with the objective to secure and invest in value-add real estate throughout Europe on behalf of institutional investors. HEVF 1 is a closed-ended Euro-denominated, Luxembourg-based investment fund that launched in July 2017. It held its final close in 2018 and the total fund size exceeded €720 million of equity commitments, surpassing its original target by more than 40 percent. HEVF 1 successfully secured 9 investments across Europe and is now focused on execution and disposition of these assets, with the anticipation that the Fund will outperform its target returns. The flagship HEVF series for Hines in Europe has a geographic mandate across the European Union and has the flexibility to invest in logistics, living, office, retail and mixed-use opportunities in institutional markets.
About the Hines European Value Fund 2 (HEVF 2)
HEVF 2 is the second closed-ended, Luxembourg-based investment fund in the HEVF series with the objective to secure and invest in value-add commercial real estate throughout Europe on behalf of institutional investors. HEVF 2 was initially launched in December 2019 and has effectively been fully allocated across 14 separate investments across the residential, logistics and office sectors. Execution and crystallization of performance is the focus and currently the fund expects to outperform its target returns.
About Hines European Core Fund (HECF)
HECF was created in 2006 with the aim of providing investors with a resilient income profile and benchmark’s outperformance, derived from a diversified portfolio of high-quality assets located in prime locations across major European cities. As of Q1 2022 the HECF portfolio was 98.5% occupied with an aggregate fund value of c.€3.0bn. The portfolio of the Fund comprises 36 assets including forward commitments, invested in 17 city markets across ten different European countries.
About Hines European Property Partners (HEPP)
HEPP is a diversified open-ended core-plus fund focused on key European markets. HEPP will leverage Hines’ expertise and boots on the ground presence in 16 offices across Europe to identify investment opportunities in Europe’s most dynamic urban centers and gateway cities. The Fund will seek to acquire and develop sustainable assets across a range of sectors including logistics, office, living – residential, student and senior housing. HEPP launched in Q2 2022 and aims to attract €1bn in investor equity to the strategy in the first 12 months from launch.