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Pictet Alternative Advisors targets direct European real estate with launch of Real Estate Capital - Elevation I fund
Pictet Alternative Advisors SA (PAA), the Pictet Group’s wholly-owned alternative investment company, has announced the launch of the Pictet Real Estate Capital – Elevation Fund I SCSp (Elevation I) for professional investors. Elevation I will invest in direct property assets in smart and gateway European cities. Such cities are at the forefront of economic digitalisation and enjoy favourable demographics from strong urbanisation trends. Elevation I will follow a value-add investment and management strategy.
The fund will be managed by a 14-person team under Zsolt Kohalmi, Global Head of Real Estate and co-CEO of PAA. Previously at Starwood Capital, he has more than 20 years’ experience managing private real estate investment. The team includes local real estate specialists in the UK, Germany, Sweden, Spain, Luxembourg and Switzerland.
Europe is currently the most attractive global market for real estate investment on a risk-adjusted basis. It has stable cap rates due to continued low interest rates and has finally started seeing rental growth. We expect the volatility in Europe in the coming years to provide interesting entry point opportunities. We believe that Europe will remain a compelling investment opportunity in real estate for some years to come.
Constrained bank lending in Europe in the decade since the Global Financial Crisis has meant that the refurbishment and development of new real estate stock across markets is running at well below the long-term average. These conditions give rise to value-add investment opportunities.
Kohalmi added, “As occupiers’ desires evolve, technology and the expectation of more environmentally-friendly buildings is also influencing demand, which provides an opportunity to create stock that is currently in short supply. Elevation Fund I will also put significant emphasis on Proptech solutions for its deal origination as well as asset management.”
Elevation I is a closed-end investment vehicle with an eight-year term. The Fund is targeting a final close by the end of the year. Elevation I is an AIFMD-regulated vehicle that is being offered to professional investors in Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Luxemburg, Malta, Netherlands, Portugal, Spain, Sweden and the United Kingdom, as well as accredited investors in Singapore and qualified investors in Switzerland.
Pictet Alternative Advisors aims to raise a second real estate fund with a core plus strategy within the next year.