16 Jul 2018

M7 reveals new €900m ambition

As reported by David Hatcher, Head of news and finance at the Estates Gazette, on 16 July:

M7 Real Estate has launched a series of new funds which aim to attract around €440m (£388m) of investor capital.

With gearing, the company will have the firepower to buy almost €900m of assets. Its new funds will separately target the UK, France, Poland and Portugal, as well as Germany, the Netherlands, Scandinavia and Ireland. The investor and fund manager is pursuing a strategy of sourcing a pipeline of opportunities for a specific jurisdiction or sector that it considers attractive and then raising medium-sized funds that allow for the speedy matching of equity to assets. This is designed to avoid any raised capital sitting around unspent in funds in order to maximise returns.

In the UK, M7 is focusing on the retail warehouse market, which is considered likely to provide relatively high yields as well as some protection from concerns in the occupational market resulting from planning restrictions on new development and limited new supply. It is close to buying the eight-asset Alpha portfolio from Cromwell Property Group for £68m, which includes five out-of-town retail warehouses.

The company is utilising software firm Coyote in order to analyse and acquire portfolios and assets quickly. Coyote, which was victorious at EG’s Tech Awards last week, is part-owned by directors of M7.

M7 raised its largest fund to date – the €400m M7 European Real Estate Investment Partners IV – last November. It is now close to fully invested, with €800m of assets.

The M7 management is considering a potential sale of the business or bringing in new investor capital, having appointed Eastdil Secured to advise the company on the process in March. A number of offers are being considered.