ING Real Estate to launch CEE offensive
ING Real Estate Investment Management (ING REIM) is setting up a second closed real estate fund in Central Europe, after its first ING Property Fund Central Europe closed in a record time of just 18 months, ING announced on Tuesday. This time, the shopping list includes real estate in Hungary, Poland, the Czech Republic, Slovakia, Romania, and Austria.
ING REIM had expected that the first fund would take three years to reach the closing volume of €700 million, but in fact the fund was already closed in March 2006, investing 60% of its volume in commercial real estate and 40% in offices in Poland, the Czech Republic, and Hungary. ING REIM is announcing the start of the second ING Property Fund CEE that, similar to its predecessor, will invest primarily in commercial real estate. The novelty of the second fund is its geographical expansion to include countries like Romania, Slovakia, and Austria, as well as investments to logistics real estate.
This time, the fund volume has also been increased. The new ING Property Fund CEE is expected to raise approximately €1 billion. Besides, this Eastern European real estate fund is part of the largest investment package ever set up by ING Real Estate Investment Management. It comprises three European real estate funds, a globally operating infrastructure fund, and a health fund. The target volume of all five funds totals €4,25 billion. Martin Sabelko, the CEO of ING REIM Central Europe, is confident that the new fund will also prove a success: “The success of the first fund has secured the team of ING REIM in Central and Eastern Europe an excellent reputation in the region.”"
Hungary as a destination
The property market of Hungary is still attractive for investors like ING Property Fund CEE. The supply on the property market has not experienced a significant boom in quantity but interest on the demand side will stay stabile. The healthy ratio of abovementioned factors will provide good background for further yield compression for high quality retail, office and logistic products, providing long-term cash flow for companies investing in these sectors.
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