Retail real estate specialist ECE Real Estate Partners has launched an open-ended, pan-European shopping centre fund with €700m of equity commitments.
The ECE Progressive Income Growth Fund has acquired a €1.6bn seed portfolio from the ECE European Prime Shopping Centre Fund, a closed-ended vehicle that has modernised and expanded the six assets in recent years.
The portfolio comprises six super-regional shopping centres in Germany, Austria, Denmark, Poland and Italy, which together encompass a total leasable area of 350,000sqm and 750 shop units.
The shopping centres are Stern-Center Potsdam, LOOM Bielefeld, Megalò Chieti, G3 Gerasdorf/Vienna, Galeria Kaskada Szczecin and Rosengårdcentret Odense.
The fund is intended to make further acquisitions and is designed to provide annual distribution yields of 6-7%.
The Otto family, which owns ECE, is an investor in the fund.
“With our high-quality seed portfolio consisting of dominant shopping centres situated in prime locations within European growth cities, we are in an excellent position to generate attractive sustainable dividend yields for our investors long-term,” said Volker Kraft, managing director of ECE Real Estate Partners.
“In addition, we see future attractive opportunities arising from our continued development and positioning of our centres into omni-channel trading platforms.”
ECE said it will seek to take advantage of “ongoing structural changes” in the retail sector and European shopping centres, which are “valued at historical lows” when compared to government bonds and other forms of real estate.
The company said “market-leading shopping centres” that incorporated the right elements were “increasingly gaining market share in a polarising” market.