Cordea Savills holds first close of its European Retail Fund
Cordea Savills, the property investment manager, has had a first closing of its EUR500m plus European Retail Fund.
The first closing raised EUR70m of equity from four German institutional investors and with gearing the fund now has capital to acquire up to c. EUR140m of assets.
The fund will initially focus on markets in Germany, the UK, France and the Nordics to construct a diversified portfolio of shopping centres, retail parks and high street retail units.
Thomas Guetle, fund director, says: “The retail sector has outperformed offices in each of the of the target markets over the 10 years to the end of 20111. We anticipate retail will outperform as a sector over the next five years in the majority of Western European economies. German investors, especially, are traditionally underweight in retail property but surveys indicate their allocations are rising so this Fund will meet their appetite for this sector.”
The fund is targeting an internal rate of return of seven per cent per annum with an average distribution of five per cent per annum after fees and local taxes over a 10-year term. It is structured as a Luxembourg-domiciled Fonds Commun de Placement (FCP) and is targeted at German institutional investors. The fund’s target size is EUR500m plus with a gearing ratio of 50 per cent.
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