DRC Savills IM closes European real estate debt fund at €600m

DRC Savills IM closes European real estate debt fund at €600m

DRC Savills Investment Management (DRC SIM), the real estate debt financing arm of Savills Investment Management, has raised €600 million for its fourth real estate debt fund, European Real Estate Debt IV (ERED IV).

Savills IM said ERED IV is the first fund in DRC SIM’s flagship high yield debt series to offer investors the opportunity to commit capital in either GBP or Euros.

ERED IV has already invested over fifty percent of its available capital and will continue to deploy capital across all major European jurisdictions including the UK, Netherlands, Germany, France, Spain, and Italy.

The fund is investing in most core, liquid assets classes including industrial, logistics, multi-family residential, student accommodation, office, food retail and hotels.

The fund focusses on providing strong income-based returns for investors with a Gross IRR range of 10.0%-12.0% with consistent quarterly cash distributions to investors.

New investments made to date include newly originated mezzanine debt, senior loans and whole loans. The fund aims to create diversification across regions, asset class, loan type and number of investments. 

Dale Lattanzio, Managing Partner at DRC Savills IM:  I am delighted to confirm that we have achieved the final close of ERED IV with over €600m in capital. This was achieved in spite of one of the most challenging markets for attracting new investors, that has existed for some time.  This is our first fund with multiple currency offerings in both GBP and Euros and will lead to further innovations in currency offerings as we move forward. The Fund is currently over 50% invested with 7 loans forming an attractive income base for our investors. We have already seen a significant increase in lending opportunities this year and with a number of opportunities already in the pipeline, we can expect to be significantly invested by year end.

Richard Anthony, Senior Managing Director at Evercore: We are delighted to have partnered with DRC SIM, as exclusive placement agent, for a fourth time to continue the success of its ERED strategy.  The growth and evolution of the DRC SIM business over the past decade has been truly exciting to witness. Support for the Fund from both existing and new investors is a testament to the quality of the DRC SIM team and the Firm’s position as a clear leader in the European real estate debt space.