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Orlando closes special situations property fund on €205m

The Germany-based private equity firm began fund raising nine months ago with an initial target of €150m to be invested in underperforming property assets.

Orlando Real Estate, the Munich private equity firm focused on special situation real estate investments in Germany, has closed Special Situations Realty Partners I.

The fund, which launched in February, has closed on committed capital of €205 million ($258 million) some €55 million above the initial target.

LGT Capital Partners, MN Services and Vanderbilt University are among the investors in the fund, which focuses on significantly underperforming properties with values between €15 million to €350 million.

 “We strongly believe the real estate market in the German-speaking countries has fundamental characteristics that validate both the timing and the strategy of this fund,” Michael Ullmann, managing partner, said in a statement.

MVision Private Equity Advisers acted as global placement agent.

The fund is following in the footsteps of a number of opportunity funds and private equity firms that have targeted underperforming properties in Germany. Blackstone, for example, entered the market for the first time in 2003 when it bought a mixed-use complex in Dusseldorf at a significant discount to replacement cost.

Germany continues to grab headlines with opportunity funds cashing in on their original investment.

Just two days ago, for example, Morgan Stanley Real Estate Funds agreed to sell thousands of houses in Dusseldorf worth €2.1 billion ($2.7 billion) to French property investment company Fonciere Des Regions.