Peakside raises EUR160 million equity for PREF IV fund in first closing
Peakside Capital Advisors AG (Peakside) has raised EUR160 million in equity in the first close of the Peakside Real Estate Fund IV (PREF IV), which corresponds to 80 per cent of the equity base of the predecessor fund.
The capital stems from institutional investors and family offices across Europe.
Overall, Peakside plans to raise around EUR350 million of equity for a total investment volume including debt of up to EUR900 million for PREF IV. Target IRR is set at 15 percent net pa. The focus of the fund lies on German real estate investments impacted by pricing dislocations and opportunities with value-add potential within a price range of between EUR30 million and EUR150 million per investment.
Stefan Aumann, Managing Partner at Peakside, says: “We are especially proud that almost all investors of the predecessor fund PREF III have also committed to the first close of the fourth iteration. Returns in both funds II and III are significantly above expectations, affirming the trust the investors put in our products.”
Frank Schäfer, Managing Director and Head of Business Development, adds: “With PREF IV, we will continue our successful active value-add strategies. As the first in the series, the fund meets the German 'real estate quota' criteria. Together with the advancement of our sustainability strategy, we are thus systematically expanding our investor base.” Peakside had signed the UN Principles for Responsible Investment (UNPRI) last year.
Only in January, Peakside announced the sale of a commercial building in Berlin’s Steglitz district, the last property from the so-called “Theodor portfolio”, from PREF III. Since then, another asset in Frankfurt was divested, marking the fourth successful sale of the total of six investments in PREF III.
Strong pipeline and additional opportunities in the second half of the year
For PREF IV, one asset is already under exclusivity and further acquisitions are in the pipeline. Peakside expects more investment opportunities from the current crisis to surface in the second half of 2021.
Boris Schran, Managing Partner at Peakside, says: “In the current environment, we are of course specifically looking at investments in the logistics and residential sectors. At the same time, we are expecting several opportunities coming out of market distortions in the wake of the COVID-19 pandemic, particularly in the retail and hotel sectors, and specifically for assets which lend themselves to conversion into office or residential use. Failed auctions or project developments with additional (re-)financing needs also offer attractive opportunities. Despite the increase of people working from home, we still believe in office as an asset class. Our pipeline is broad and filled accordingly.”
The company itself came through the past year quite well. Boris Schran comments: "Of course transaction and leasing processes have slowed down also for us. But at the same time, we experienced a strong resilience in our tenant base.”