Emerging Market Property launches Croatian fund

The London-based property developer, which specialises in the emerging countries of central and eastern Europe, has launched the fund to invest in property assets in Croatia where the country's growing economy and changing demographics have led to a shortage of supply.

The initial focus will be on the development of residential property for the local Croatian market, primarily in the second cities of Split and Rijeka.

The fund, which aims to raise €10m (£9.2m), has a target internal rate of return of 25 per cent to 30 per cent a year.

It is being promoted on behalf of Emerging Market Property by Blue Gate Capital, the Manchester-based investment management company and is primarily aimed at self-invested personal pensions (Sipp), small self administered schemes (SSAS), and private equity investors.

It is available to investors via an exempt unit trust for Sipp investors or, for others, directly into a limited partnership.

The minimum investment required is £50,000.

The Croatian government has recognised a severe shortage of suitable residential property in the growing secondary cities and King Sturge estate agents has highlighted the requirement for more than 500 new homes a year for the foreseeable future in Split alone.

Meanwhile, as Croatia is expected to join the European Union by 2011 at the latest, and with the convergence of its legal and commercial systems with EU standards, Andrew Piper, director of Emerging Market Property, said the country offers the investment opportunities of a developing economy combined with a business environment modelled on the countries of Western Europe.

Mr Piper said: "Following the success of our previous developments in Croatia, we have launched this fund to cater for a clear shortage of first homes, particularly in its second cities.

"This demand is being driven by increasing city populations catering for the ongoing growth in tourism, as well as the aspiration of an increasingly affluent middle class for higher standards of accommodation.

"We anticipate this demand further increasing as Croatia prepares to join the EU - now anticipated for 2011."