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European investor and asset manager M7 Real Estate has raised over €40 mln in equity and loan notes for its second Continental European real estate fund.

Investors included a US-based multi-strategy private equity firm, together with a number of existing M7 investors.

The fund, M7 European Real Estate Investment Partners II (M7 EREIP II) has purchased a portfolio of 42 assets in three individual acquisitions in the Netherlands, including the Spring Portfolio that originated from a non-performing loan. The purchases comprise a total of 135,688 m2 of space and were made from three different vendors.

The combined purchase price was over €82 mln, representing an initial yield of approximately 11%. The assets, with a combined vacancy rate of 25%, are located throughout the Netherlands and comprise a mixture of multi-let office, local retail and light industrial property.

M7 will act as investment adviser and asset manager to the fund.

'The portfolio that M7 has assembled for the fund provides a combination of exciting value-add opportunities together with some longer let assets. This enabled us to source attractive senior financing and offer our investors either an attractive bond return or more value-add equity return,' said M& CEO Richard Croft.

The fund was structured by Goodwin Procter, and Van Doorne acted as real estate legal advisers to M7 EREIP II. Ringstate advised M7 on the acquisition of the Spring portfolio. Deutsche Bank provided the senior debt facility.

M7 has also had a second close for its first European fund (M7 EREIP I), taking equity commitments to €23 mln. The fund has notarised a second portfolio taking the fund’s gross asset value to €55 mln. A third and final close is expected in mid-November, to acquire the vehicle’s third portfolio.

Established in 2009 and wholly owned by its senior managers, M7 manages a portfolio of 455 assets comprising 3.1 million m2 with a capital value in excess of €1.5 bn.