TH Real Estate has raised €500m in the first close of its European Cities Fund.
The open-ended fund will target core assets across the Continent with an initial firepower of about €700m – an LTV of 28%.
Over the next five years, it expects to raise €3-€5bn with an LTV averaging 30%.
The fund secured its first asset in May when it bought Meraville Retail Park in Bologna, Italy, with a €46.7m loan provided by ING.
Upcoming deals will focus on 42 “future-proof” cities with the potential for long-term growth in real estate.
Andrew Rich, fund manager of the European Cities Fund, said: “The founding principles of our strategy are to look through market cycles and focus on those cities where people will want to live and work in the future.
“As a new fund with capital to deploy and only one existing asset, the fund is well placed to take advantage of any movement in market pricing.”
European Cities Fund was launched in March 2016 with a €200m co-investment from TH RE parent company TIAA.