REAL ESTATE – UK manager Henderson Global Investors has teamed up with German property manager mfi to launch a closed institutional fund to invest in German shopping centres.
The fund is targeted to investors in Germany and abroad and promises a total return of 7.5% per annum. In the mid-term, Henderson expects the fund’s volume to reach between €2bn and €3bn.
According to Henderson, the Luxembourg-based fund has had a good start, having taken in €200m in assets.
Henderson will act as the adviser for the fund, while mfi will manage the fund’s property – including existing and that to be developed. The properties will be 80% shopping centres and 20% specialist stores.
"Demand for high-quality and modern shopping centres among long-term oriented institutional investors is very great. The main reason for this is that they can generate stable cash-flows from such investments," noted Peter Landgraf, chief financial officer of mfi.
In selecting the type of institutional fund, Henderson has chosen Luxembourg’s new FCP vehicle over a German Spezialfond. The UK house said the decision had to do with restrictions that Spezialfonds face in terms of indirect investments and corporate loans.
Many mutual funds distributed in Germany are already based in Luxembourg owing to the Grand Duchy’s lower taxes and lighter regulation.
Beyond its relationship with mfi, Henderson is a joint venture with German private bank M.M. Warburg that offers real estate Spezialfonds. Launched in 2001, that venture has taken in €2.3bn in assets from institutional investors, with 30% of the volume coming from pension funds.
Separately, DekaBank, Germany’s biggest provider of open-ended real estate funds, said it had sold its triangular-shaped ‘Trianon’ headquarters in Frankfurt along with five other buildings to a real estate fund run by the German arm of Morgan Stanley.
DekaBank did not disclose the price of the properties, but German press reports estimated it at €620m. DekaBank will remain in Trianon, renting the space it needs from Morgan Stanley.
Completed in 1993, Trianon, a 186-metre skyscraper, is one of the most conspicuous buildings in the city’s skyline.
