AIB Capital Markets is to raise as much as €150 million to invest in property in Poland, the bank's second foray into this area.

AIB said it plans to invest the funds, which once leveraged will total about €600 million, in a range of asset classes including commercial, retail and residential properties, as well as development opportunities and has already identified a series of prospective investments. The bank said it may also consider joint ventures with strategic investors.

Michael O'Hara, president and chief executive of AIB Capital Markets' Polish subsidiary, welcomed the news, saying the Polish property market currently represents an excellent investment opportunity.

"Looking at the various macroeconomic factors at play in Poland, we believe there are significant returns to be generated through another property investment opportunity there," he said. "We will aim to capture good secured cash flows with rising rents combined with increased occupancy in a landlord market."

AIB said it will also look to diversify out of the main Polish cities into other Central European countries, such as Hungary, the Czech Republic, Slovakia, Slovenia and the Baltic States.

The minimum investment will be €150,000 for pension funds and €250,000 for private investors. The investment period will run for at least seven years, with an option to extend for an additional two years.

Yesterday's announcement follows the success of the bank's Polonia 1, which raised €101 million in equity and was leveraged to €390 million. Mr O'Hara said the bank had already received significant interest from pension funds and private investors for a new Polish property fund.

The fund is due to close at the end of May.