Blue Owl Capital, an alternative asset manager, announced the final close of its inaugural European net lease fund with €1.6 billion (US$ 1.8 billion) in total capital commitments, exceeding the original target of €1.0 billion (US$ 1.1 billion) and its previous hard cap of €1.5 billion (US$ 1.7 billion).
According to a press release, the Blue Owl Real Estate European Net Lease Fund (OREF Europe) will focus on acquiring single-tenant net-leased real estate and infrastructure assets, critical to the operations of blue-chip, investment-grade tenants. This includes mission-critical industrial, data center, and essential retail assets.
“We believe Europe represents the next frontier for institutional sale-leasebacks. Having successfully executed this strategy targeting investment grade corporations across the U.S., we are applying the same disciplined approach to a European market which represents an estimated €13.4 trillion opportunity, where we believe many of these companies can unlock substantial value by monetizing owned real estate and reinvesting that capital into more accretive uses across their business,” said Marc Zahr, Blue Owl Co-President and Global Head of Real Assets.
In the near term, Blue Owl has assembled a pipeline of industrial and logistics, essential retail, healthcare, life sciences, cold storage, and corporate headquarters assets.
The Blue Owl Real Estate Fund VII in the US, which has yet to officially close, reportedly has the flexibility to commit 20 to 30 percent of its capital to data centers according to IPE Real Assets. While data centers aren’t on the cards for OREF Europe right now, that may change.
The net-lease strategy behind OREF Europe and Blue Owl’s Digital Infrastructure sit within the firm’s Real Assets platform. Despite operating under the same umbrella, funds such as OREF Europe acquire sale-leaseback assets, while Digital Infrastructure builds and operates data centers.
Data centers are a key interest for Blue Owl. As noted by Chief Financial Officer Alan Kirshenbaum during the firm’s most recent earnings call, Blue Owl Capital’s data center footprint spans 140 data centers, owned or under construction, with 15.3 GW of leased and owned capacity.
Earlier this year w.media reported that Blue Owl provided financing to the tune of US$ 975 million for Project Helios, a new hyperscale data center campus in Northern Virginia.
Mordor Intelligence forecasts that the data center market will grow from US$ 58.9 billion in 2026 to US$ 108.9 billion by 2031. While constraints such as grid congestion hold back development in Frankfurt, London, Amsterdam, Paris, and Dublin, this is pushing developers to scout other locations. That constraint may explain why data centers don’t feature in OREF Europe’s near-term pipeline.