Heitman European Property Partners III Fund is targeting all the real estate food groups and will invest in several countries, including Poland, Hungary, the Czech Republic, Slovakia, Slovenia, the Baltic States, Romania and Bulgaria. Working mostly out of Warsaw, Heitman has a team of 45 people investing the fund.

Gordon Black, managing director of Heitman's European private equity group, tells GlobeSt.com that about 20% of the fund has been invested to date in four projects with a total cost of around euro 200 million ($234 million). Those investments include stabilized office properties in the Czech Republic, an existing logistics park in Slovakia that will be expanded, and residential developments in Poland and Bulgaria.

Black says the residential market is hot right now because the growing availability of consumer finance and mortgages is supporting a shift from Soviet-era housing facilities to modern condominiums. "We see tremendous potential for the sector," he says.

Things have become more competitive throughout Europe, but Black says that is a good thing. "For us in the beginning, with our first fund, the No. 1 question was 'where is our liquidity going to come from?'" he says. "It's no longer an issue, because there are a significant amount of core asset buyers out there, and we are supporting that by creating assets that those core buyers will want, and also buy providing capital."

The two previous HEPP funds have acquired properties in Europe with a combined value of $1.2 billion. Heitman manages approximately $13.5 billion in assets invested directly and indirectly in real estate in the US and Europe.

Instant Insights /

Heitman Has $1B Buying Power in Third Euro Fund

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