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Shinhan Alternative commits $245 mn to residential fund in Europe

Dec 17, 2020 (Gmt+09:00)

Courtesy of Patrizia

Shinhan Alternative Investment Management Inc. has committed 200 million euros ($245 million) to a multifamily housing fund in Europe managed by Patrizia AG, on behalf of a South Korean retirement fund, according to a Shinhan source on Dec. 17.

The unidentified Korean institution is investing in a new co-investment vehicle of Patrizia Living Cities Residential Fund, a flagship fund of the German real estate investor.

“Multifamily assets in Europe produce more stable income than in the US. But because of different regulations by country in Europe, direct investment can be difficult, so we participated in the Patrizia fund,” the Shinahn Alternative source told Market Insight, the capital market news outlet of The Korea Economic Daily. 

The vehicle will invest in multifamily rental houses in European metropolitan cities, including Berlin, Amsterdam and Stockholm. It targets a 7-8% annual internal rate of return with a dividend yield of 4-5%.

Patrizia launched the Living Cities Residential Fund in November of last year, targeting to raise 1 billion euros for the vehicle. The fund had received $50 million in commitment from Korea Post and $30 million from the Korea Scientists and Engineers Mutual-aid Association.

The flagship fund focuses on core assets, but may have exposure to development finance to shore up returns, Mahdi Mokrane, Patrizia's head of investment strategy and research, told Market Insight in an August interview.

Patrizia manages over 45 billion euros in assets, of which residential assets account for 11.4 billion euros. It runs offices in 19 cities across Europe and employs over 200 investment professionals.

(Amended on Dec. 18 to clarify a single Korean retirement fund invested in the residential fund via Shinhan Alternative.)
Write to Sang-eun Lucia Lee at

Yeonhee Kim edited this article.

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