AIB Looks Again to Poland for Property Fund

Jason Corcoran

19 April 2007

The capital markets division of Irish bank AIB is aiming to set up a €600 million fund for property investments in Poland. The capital raised, between €100 million and €150 million, will be leveraged to provide a fund worth around €600 million for investment in commercial, retail, residential and development property opportunities. AIB said the minimum investment will be €150,000 for pension funds and €250,000 for private investors. The investment period will run for at least seven years with an option to extend for an additional two years. The fund, called Polonia II, is AIB's second in the Polish market. It raised €101 million in equity for Polonia I in 2003 and leveraged it to €390 million. The new fund is aiming to buy high quality properties in Warsaw and regional Polish cities. It will also look at opportunities in other central European countries, such as Hungary, the Czech Republic, Slovakia, Slovenia and the Baltic states. The bank said its investment strategy will cover a range of asset classes such as prime quality commercial, retail, warehouse logistics, residential and development opportunities and may also join ventures with large strategic investors. In a statement, Michael O'Hara, the head of the AIB fund, said: "Polonia I has provided us with an excellent track record in this area and we have already received significant interest from pension funds and private investors for a similar investment opportunity. As with Polonia I we will look to ensure that we secure properties at the top end of the market with the emphasis on medium term capital appreciation." The fund is due to close at the end of May.