ARA Venn's European real estate debt fund bags 200m euros for first close

ARA Venn has raised 200 million euros (S$313.8 million) from institutional investors for the first close of its latest whole-loan European real estate debt fund.

ARA Venn is the trading name of Venn Partners LLP, a London-based specialist debt fund manager in which ARA Asset Management took a majority stake earlier this year.

ARA Asset Management participated as a cornerstone investor in the latest fund, Venn Commercial Real Estate Fund II (VeCREF II).

All external investors of an earlier fund, VeCREF I, also invested in the new fund. Previously, VeCREF I deployed more than 520 million euros across 24 commercial real estate loans.

VeCREF II will invest in whole loans secured by commercial real estate assets across Western Europe, targeting a net internal rate of return of "mid to high single digits" and regular quarterly income distributions for its investors, ARA Venn said in a press statement.

The latest fund's investment strategy targets loans secured by value-add real estate opportunities across all asset classes, including residential and alternatives.

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It will focus on major conurbations - extended urban areas typically comprising several towns or cities - in France, Germany, Ireland, the Netherlands, Spain and the UK.

Paul House, joint managing partner and head of the commercial real estate team at ARA Venn, said the current uncertain market environment will be "very interesting" for non-bank lenders who are unencumbered by legacy loan assets and who will thus be able to "assist with financing requirements when others are less able to".

Beatrice Dupont, partner in the commercial real estate team, said the firm is analysing a number of opportunities to deploy capital "into a market which promises to be very attractive for real estate debt in relative value terms".

Singapore-based real assets fund manager ARA Asset Management manages Singapore-listed Suntec Reit, Cache Logistics Trust and ARA US Hospitality Trust, and has a stake in Cromwell Property Group, the sponsor of Cromwell European Reit.