TIAA Henderson Real Estate is launching a German Spezialfonds investing in core retail property.
The €400m Core German Retail Fund will invest in core and core-plus German retail real estate, including specialist retail parks, self-service department stores, hybrid malls and inner city shopping centres.
The fund will seek sites in German metropolitan areas and medium-sized towns. Target properties will have a gross rental area of at least 7,500 sqm. Leverage of 40% to 45% will be applied to the fund, which has a 10-year life. TIAA Henderson said it was aiming for an annual distribution yield of around 5.5% on invested capital.
Thilo Wagner, director of investment, Germany, said: “German retail property offers an attractive distribution yield combined with prospects for further value appreciation.”
Last year, TIAA-CREF and French insurer CNP Assurances co-invested in a $1.2bn (€924m) portfolio of German shopping centres. TIAA-CREF acquired three shopping centres – PEP in Munich, Erlangen Arcaden in Erlangen, and Gropius Passagen in Berlin. The deal makred the first time that TIAA-CREF has managed European properties for a joint venture.