LaSalle Investment Management has bought a regional UK shopping centre for £141m (€177m) for Alaska Permanent Fund Corporation as the manager shifts to “mid-cycle” investment strategies.
Golden Square Shopping Centre in Warrington, in the northeast of England, was acquired from Warrington Retail Limited Partnership, a 50-50 joint venture between Lend Lease and Legal & General.
It is the first investment announced since LaSalle was awarded a £250m mandate by the US institution to invest in UK real estate. The Alaska Permanent Fund is seeking to make single investments worth between £50m and £150m.
The acquisition of the 712,500 sqft asset coincided with the release of LaSalle’s mid-year strategy update, which makes the case for investing outside Europe’s gateway cities.
During a briefing in London, Mahdi Mokrane, head of European research and strategy at LaSalle, described 2013-15 as a “mid-cycle” investment period during which investors would have to accept historically low returns on prime assets or take on more risk.
LaSalle still sees opportunities in core property – including the long-term holding of “irreplaceable assets” and index-linked niche sectors. But in a sign of increased risk appetite the fund manager has resumed bidding on development projects in Paris and Munich for the first time since 2006, according to European CEO Simon Marrison.
Mokrane also said there could be opportunities to “harvest gains from core assets” in Germany and London, and to redeploy capital into markets such as the southeast of England.
LaSalle has also “mispriced core” assets in Italy, and Marrison said the house view was that Italy could offer better opportunities than Spain partly due to there being less competition. Marrison said the occupier recovery in the latter was likely to be a “slow burn”.
He went on to say that investors unable to access Spanish assets in central Barcelona and Madrid were likely to “rotate” to central and eastern European markets, principally Poland.