Hines, the global real estate investment, development, and property management company, said it has topped its fundraising goal in the final closing of its latest European real estate value fund, to raise over €1.6 billion or $1.75 billion.
Launched in mid-2022, the Hines European Value Fund 3 has now exceeded its target of €1.5 billion of equity commitments. Hines said over €620 million in capital was committed in 2023 despite what it termed challenging economic conditions and a difficult fundraising environment.
The total number of investors in the fund is now 35, with a mix of existing and new investors, in addition to Hines' co-investment. Hines says most of those investors are major institutional pension funds and global insurance firms.
Hines says HEVF 3 has already invested over €300 million of equity to assemble a portfolio of four assets in three markets. The investment period for the fund is expected to continue until mid-2026 and will prioritise three sectors, purpose-built student accommodation, distribution logistics and highly sustainable offices in prime locations. Hines said these sectors have "significant unmet demand and present opportunities for ongoing rental growth".
In London in July the fund bought the 103,000-square-foot Film House, the former headquarters of Nike, in the West End from WeWork's investment arm Ark for a price of around £135 million.
The building comprises 94,000 square feet of office and 9,000 square feet of restaurant space in Wardour Street and was HEVF 3’s third investment. Ark bought the building with a hotel scheme stapled to the asset. It comprises three adjoining buildings that had planning consent for a 176-bed "lifestyle" hotel, rooftop restaurant and bar.
Hines confirmed to CoStar News that the other assets are a "highly sustainable new purpose built student accommodation tower in west Barcelona", reported on here by CoStar; a "brown-to-dark-green office refurbishment in Cologne", which it bought from Generali for €40 million; and a "large logistics site close to Leipzig for DGNB Platinum warehouse park development".
HEVF 3 is being rebranded as Hines European Real Estate Partners III.
Hines explained the rationale as being to clearly communicate Hines' suite of funds to investors across different geographies and risk profiles. The HEREP Fund series sits alongside the Hines European Core Fund and Hines European Property Partners, offering a range of investment products "across the risk spectrum in high-growth European markets".
Paul White, senior managing director and fund manager of the HEREP series at Hines, said in a statement: “With HEREP III now closed for equity subscriptions and almost 20% allocated into highly attractive value-add opportunities across Europe, we are fully focusing our attention to sourcing additional opportunities to grow and diversify HEREP III’s portfolio. The fund aims to deploy capital into structurally supported market segments including well-located logistics, office and living properties, with Hines’ skillset of value creation expertise enabling us to drive significant improvements in the portfolio’s ESG credentials and operational performance.”
Since entering Europe in 1991, US real estate giant Hines, which was founded by Gerald DHines in 1957, has grown its European platform to include offices in 17 cities as well as a presence in 60 cities in 14 countries.
Update on 30 November to add the assets.