Real estate firm Hines raised about €637 million from 13 institutional investors at the first close of Hines European Value Fund 2, which has a total fundraising target of €1.25 billion.

Hines is co-investing 5% of the total commitments to the investment vehicle, which is expected to have total purchasing power of approximately €3 billion. Subsequent closings are expected to take place through 2020.

The fund will target a net internal rate of return of 11% to 13% and will primarily target office assets.

Hines recently signed two seed assets for the fund, including an office asset in Munich and a residential project in Madrid, and has taken into exclusivity a mixed-use office/retail project in the West End of London, for a total investment of €300 million. It expects to make additional purchases in early 2020.