Banor Capital has announced the successful closure of its second fund, Banor Special Situations II (BSS II), with a total of 240 million euros raised.
The fund focuses on acquiring real estate assets from auctions and insolvency proceedings, as well as mortgage credits from servicers or directly from banks.
The primary aim is to finance new real estate projects through subordinated debt instruments.
The fund's investments are concentrated in Italy, the UK, and Spain.
As of March 31, BSS II has completed four transactions, with two new investments totaling approximately 46 million euros.
These add to two previous deals concluded by the end of 2023, bringing the total invested capital to around 115 million euros.
One of the latest investments includes a mezzanine loan of 21.5 million pounds for the acquisition and renovation of a residential property in London's Belgrave Square.
The property, a villa exceeding 20, 000 square meters, is set to be fully refurbished and sold with an estimated value of 72 million pounds.
The project is sponsored by Fenton Whelan, a prominent real estate operator in London's super-prime areas.
In Spain, Banor Capital has signed a senior loan of 24 million euros for the development of a 15-villa complex in Mallorca's western region, near Andraxt and Cala Fornells.
This project is a co-investment with Erebus Real Estate and will be executed by Construye Capital, a leading local real estate developer, with marketing by Engels & Volkers.
Five of the 15 villas have already been pre-sold.
The fund's initial two transactions involved a preferred equity of 25.5 million euros from a newly established Italian real estate fund, Urban Living III, for a 12, 000 square meter area in Milan's San Siro district.
This project aims to develop 120 residential units, including affordable housing, with Varallo RE as the sponsor and anchor investor.
Additionally, in Spain, a senior loan of 12.95 million euros was provided for acquiring land and developing a mixed-use real estate project in Alcobendas, in partnership with Erebus Real Estate Partners.
Lorenzo Guidi, portfolio manager at Banor Capital, noted that the general market uncertainty and higher interest rates over the past 18-24 months have slowed real estate acquisitions and financing.
However, this environment has allowed selective transactions with attractive risk/return profiles.
The average gross returns of the first fund were around 14.6%, while the latest four deals of the second fund have seen returns rise to 17.5% due to increased rates.
Banor Capital remains optimistic about market opportunities, given the limited availability of bank financing for real estate.
The market continues to reward quality in terms of location and asset type, and there is still substantial liquidity in the system despite higher debt financing costs.
Strategically, Banor Capital focuses on residential properties, particularly in Spain, hospitality mainly in Italy, and student housing across all target markets.
The previous fund, Banor Special Situations I, raised 115 million euros and completed 21 investments, with 40% in Italy, 40% in the UK, and 20% in France.