IVG Immobilien, Germany's largest listed property company, aims to raise up to EUR 250 mln of equity from institutional investors in the second half of 2011 for its first core to value-add investment fund. The move, which reflects investors' growing appetite for risk, comes as attractive yields have become increasingly difficult to find in the core spectrum of the major European markets.

'Investors need to go a bit off the track to find good pricing,' CEO Gerhard Niesslein told PropertyEU. 'We believe there are still opportunities in investing in core properties with some upside potential in terms of leasing or repositioning.'

The IVG Deutschland Plus fund will to be managed by Karin Weikamp and will target German office properties in the 'Top 7' cities (Berlin, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart, Köln).

The fund will make use of leverage of 30-50% giving it a spending power of up to EUR 500 mln. The bulk of the investments will still have a core profile (50%), while core-plus and value-added investments will account for the remaining (50%) and help lift the fund's overall performance.

'This is a new step forward for IVG and reflects a more dynamic approach undertaken by the company,' said Steffen Ricken, a member of the management board of IVG's Institutional Funds business. 'IVG is very well placed to make core-plus and value-add investments, which require local management expertise and a strong team of professionals. With five branches across Germany, IVG will leverage on its wide presence on the ground.'