International real estate company HDG Mansur is aggressively seeking to raise up to $500 mln (EUR 352 mln) of equity in the US and Europe to tap into investor demand for income-producing assets.

After a few years dedicated to dealing with the fall-out from the financial crisis, high-net-worth individuals and institutional players are signalling they are ready - albeit cautiously - to start investing again, HDG founder and US property veteran Harold Garrison told PropertyEU.

‘Income-producing assets, such as real estate, are top of the agenda for at least 95% of the investors we have spoken with,’ he said.

While concerns about the sovereign debt crisis in Europe, weak GDP growth and inflation persist, HDG believes there will be enough good markets over the next 3-5 years to meet this need for income.

HDG is working on three strategies: direct investment, club vehicles and a real estate fund. ‘Club deal structures, involving a small pool of investors, are becoming more popular,’ he said.

Garrison declined to provide exact targets, but said he would like to raise between $250-500 mln over the next 12 months for direct investments and club deals, and possibly also a new fund. He added that the equity would be raised both in the US and Europe.

HDG is actively bidding in both the US and Europe for single-tenant office properties. Garrison believes this is the most attractive asset type at the moment for investors looking for income, and that the most efficient lot size for this strategy is in the $30-50 mln price range. The next asset class HDG will look at is logistics.

In terms of location, Garrison noted that HDG is watching the German markets closely. Scandinavia is seeing a lot of activity, mainly due to investment by local institutional players. London has recovered faster than many people expected but regional cities such as Edinburgh are also becoming attractive, he said.

Garrison told PropertyEU that he is looking at opportunities to grow HDG by merging with a smaller companies, providing diversification by property type as well as geographically. Click on the link below to read more about this.

Founded in 1982, HDG is a veteran of several cycles and has completed $5.1 bn of real estate investments. The company has offices in Indianapolis, New York, London, and Dubai. At end-March this year HDG had $2.2 bn of assets under management. HDG is also a specialist in investments suitable for Shariah investors.