BlackRock eyes European, global property funds

LONDON Tue Jul 5, 2011 9:20am BST

A BlackRock building is seen in New York June 12, 2009. REUTERS/Eric Thayer

A BlackRock building is seen in New York June 12, 2009.

Credit: Reuters/Eric Thayer

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LONDON (Reuters) - BlackRock (BLK.N), the world's largest fund manager, is planning two new funds investing in pan-European and global real estate in the next 3-5 years after recruiting a new property head, a senior executive told Reuters.

James Charrington, BlackRock's chairman for the EMEA region, told Reuters in an interview the company was planning to invest in buying buildings when the time came for expansion.

"We have a very strong ... team in UK real estate. We do not have a global product and we do not have a pan-European real estate product. Do we have a mission to do it? Absolutely."

"We need to build the infrastructure that can support that product," he said, noting BlackRock had appointed LaSalle's (JLL.N) Asia Pacific head Jack Chandler to drive the unit's development. Charrington declined to give BlackRock's fund-raising target for the new funds.

As part of the real estate unit's expansion, Blackrock -- which manages $3.65 billion (2.27 billion pounds) in overall assets -- may also make a foray into real estate debt.

In the two years to 2013, the global commercial real estate funding gap -- the difference between debt needed for refinancing and the money available -- fell to $202 billion. But there is a growing appetite for funds specialising in senior or junior property debt.

"As a big fund manager in debt markets, we would potentially be interested in it (real estate debt). It could easily be both senior and junior, I would not rule out (either)... the first step was to bring in a head of real estate," Charrington said, referring to Chandler.

(Additional reporting by Andrew Macdonald; Editing by David Hulmes and Dan Lalor)