Stellar Asset Management has launched a second property fund aiming to take advantage of Albania’s fledgling property market.
Stellar, which launched a Baltic States property fund in May, has made its second foray into niche markets with the new fund. The firm is in partnership with a local developer building residential property to take advantage of the growing mortgage market in the country.
“It is fairly small, we need to raise €1m (£790,000) in equity and the fund will be brought up to around €6m through local debt,” says Steve McKeever, property director at Stellar.
“It’s a closed-ended fund and the project has a development period of around two and a half years, which is reasonably small for this kind of fund.”
McKeever says Stellar has already raised half the required funds for the project in a week.
He says Albania is set to benefit from its planned accession to the European Union, which it expects to be completed by 2014. Albania has already received €100m from the EU.
“It’s very much our intention to do more in this country as we think Albania is making great strides,” says McKeever.
A World Bank report published in 2007 highlighted Albania’s high GDP growth of between 5% and 6% annually combined with a dramatic reduction in poverty, with the percentage of people living in absolute poverty falling by 7.3% between 2002 and 2005.
Sali Berisha, Albania’s prime minister, has said he is confident that there will be developments in his country’s integration into the EU over the next year.
Albania has already received significant investment from the EU as well as from international bodies such as the International Bank for Reconstruction and Development.
Although the Baltic States fund had a minimum investment of £25,000, the new fund will be accessible for less than half that.
“Here we believe it will do 20% per annum for our investors, but it is still a speculative bet so we deliberately lowered our minimum investment to £10,000,” says McKeever.
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