Mapletree raises €507m fund on €1.2b European office portfolio

Singapore’s Mapletree has closed its first pan-European office fund at €507 mln, five years after first moving into Europe.

The fund will own seven large offices valued at €1.2 bn which the investor has acquired in that time. They include 69,000 m2 West Station in Warsaw, 43,300 m2 Papendorp Park in Utrecht and 3 Hardman Street, a 36,704 m2 building in Manchester’s Spinningfields.

Mapletree said the target internal rate of return for Mapletree Europe Income Trust (MERIT) is 12% which attracted 1.5 times interest from new and repeat investors.

The company said the investors numbered pension funds, insurance companies, asset managers and private banking clients. Mapletree will retain a 27% stake which is its policy with its other sponsored private funds, as well as its four Singapore-listed REITs.

Hiew Yoon Khong, Mapletree’s group chief executive officer, said that the successful raise amidst the Covid-19 pandemic ‘demonstrates the confidence and endorsement that investors have in Mapletree’s fund management capability and track record.

‘Investors of MERIT will benefit from a robust and stable income stream generated from a portfolio of high quality European commercial assets, anchored by long lease profiles.’

The syndication of MERIT is in line with Mapletree’s business model, which includes being an active capital manager in both the private and public markets. The fund is the Singaporean investor/manager’s 11th private vehicle globally.

As well as offices, Mapletree is an active investor in Europe in logistics and student housing. A year ago, the company raised €1.7 bn for a first EU/US logistics fund, called the MUSEL Private Trust fund.

The offices in MERIT also include 31,505 m2 Nova Atria in Dublin’s Sandyford Business Park, Dachauer Strasse 641-655 on Munich’s outskirts, and one each in Aberdeen and Bristol. A diversified tenant base includes a significant number of companies of high credit quality from growth industries as well as defensive industries in light of Covid-19, Mapletree said.

These include Technology, Media, and Telecommunications (TMT), professional services, as well as healthcare and pharmaceutical sectors. In addition, the portfolio has high occupancy and a WAULT of 6.8 years.

The vehicle has a term of five years with provision for two, one-year extensions.

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