UNITED STATES - Developers Diversified Realty has unveiled a new retail investment fund called DDR Domestic Retail Fund I.
A total of $539m (€401.7m) equity is invested in the commingled fund, of which around $430m or 80% of the equity came from a group of institutional investors, including three Dutch pension funds.
The remaining $109m or 20% of equity has been financed by Developers Diversified into a fund which is already 100% fully seeded, noted David Oaks, chief investment officer at Developers Diversified.
"This did give us an advantage over our competitors, who are mostly raising capital for blind investment funds," said Oaks.
Pension funds are increasingly of the opinion is one of the best ways to invest in retail real estate, according to Developers, is to buy into an existing portfolio, rather than trying to raise capital to buy properties on your own as much of the best retail property is said to be held by public REITs.
Total purchase price of the portfolio is $1.5bn, with debt leverage of 65%.
Assets are split in two different portfolios and around 75% of the assets are held in a $6bn portfolio Developers Diversified acquired with Inland Retail Trust while the remaining 25% is in properties Developers Diversified owned with other investment partners.
The portfolio contains a total of 63 properties, measuring 8.3 million s.f. (0.743224m2), and are primarily in grocery-anchored shopping centers of the US.