Heitman Eastern European Property Fund

Location:

Regional

Project number:

40440

Business sector:

Property and tourism

Notice type:

Private

Environmental category:

FI

Target board date:

29 Jul 2009

Status:

Signed

PSD disclosed:

12 Jun 2009

Project Description

The proposed project is an equity investment into Heitman European Property Partners IV (the “Fund”), an investment vehicle pursuing long term capital appreciation through real estate investments. The Fund will be established for the purpose of developing, reconstructing, acquiring, owning and managing real estate property in Central and Eastern Europe as well as Russia and Ukraine (“the Region”), with aggregate capital commitments of up to EUR 600 million.

Transition Impact

The Fund will add crucial liquidity to the property market in its target region, creating buyer demand. Since the beginning of the current financial and economic crisis no notable property investment transactions have occurred; investors are still establishing a view on market stabilisation and future prospects. With the volume of capital the Fund has at its disposal and Heitman's in-depth knowledge of the market, the Sponsor has the potential to play a catalyst role to re-open the acquisition and development market in the Bank's countries of operation, and in doing so creating a strong counter-action against the credit crisis.

Development of new assets will benefit the primary property markets in the target region not only by adding extra stock to the market but also by providing investment grade assets and thus setting a new standard in terms of quality, especially in secondary cities. Furthermore, the acquisition of standing assets serves directly to increase the breadth and depth of secondary property markets.
The project will also assist and promote the development and construction of real estate assets to meet the requirements of international institutional investors, creating important backward linkages to joint venture partners and local sub-contractors, particularly with regard to active asset management techniques.

The Client

A special purpose vehicle, organised under the laws of Luxembourg managed by Heitman International. Heitman is a reputable multi-national real estate investment manager, managing funds in the United States, Europe and Asia with USD 19.6 billion in assets under management. Heitman will invest EUR 15.5 million in the Fund. The residual amount of up to EUR 584.5 million will be contributed by institutional investors from Europe and North America, as well as by EBRD.

EBRD Finance

EUR 75 million equity commitment.

Project Cost

EUR 600 million aggregate equity commitments.

Environmental Impact

Screened FI. Heitman is an existing client and already implementing the Bank’s Environmental Procedures for Property Funds. For the proposed operation, Heitman is required to continue to implement adequate environmental and social risk management procedures in accordance with the Bank's Performance Requirement (PR)2 and 9 including the submission of an annual environmental report to the Bank.

Technical Cooperation

None.

Company Contact

Gordon Black, Heitman International
191 North Wacker Drive,
Chicago, IL 60606

Tel; +1 312 855 5700
E-mail: Gordon.Black@Heitman.com

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