Union Investment and REDOS are launching a €500m institutional fund targeting large-scale retail property in Germany.
The joint venture has raised €250m for the new REDOS Einzelhandel Deutschland fund, which is aimed at pension funds, superannuation schemes, banks and insurance companies.
REDOS, which has a €1.1bn portfolio of 77 German retail properties, will be fund manager and asset manager for the joint venture. Union Investment will provide fund administration through its Service-KAG business. The companies will manage investor accounts jointly.
Large-scale superstores and hypermarkets, as well as in retail warehouses, are being targeted by the fund.
The two companies said that four properties worth €50m have so far been bought for the new joint venture. A further €70m of properties are “almost signature-ready” they said.
“The investments will concentrate on selected sites characterised by high purchasing power and centrality,” said REDOS managing director Oliver Herrmann, who highlighted the benefit of planning restrictions.
“Municipal governments rarely ever zone new sites for large-scale retail units,” he said. “The licensing practice is highly restrictive.”
This, said Herrmann, makes existing properties “particularly interesting for institutional investors with a focus on core properties”.
REDOS recently worked with Morgan Stanley’s MSREF funds, buying the Christie retail portfolio from M&G.