European retail property-focused investment manager Redevco is planning to branch into other real estate sectors as it aims to increase its assets under management (AUM) from €7.5bn to €10bn in five years.
The Amsterdam-headquartered company, which originally grew out of the C&A clothing chain and is owned by the COFRA Group, has been growing its AUM by investing with third-party institutional investors in recent years – two years ago it set up a partnership with Dutch pension fund investor PGGM.
Redevco said it planned to grow even further by widening both its investor base and its sectoral focus to include offices and last-mile logistics.
Third-party mandates now represent 40% of Redevco’s AUM and the company said it is “extending the opening of its investment platform to like-minded investors and will consider a variety of investment vehicles to broaden its investor base, with an initial focus on joint ventures”.
CEO Andrew Vaughan said there was “a great opportunity to leverage our pan-European investment platform and local specialist teams across 13 national markets to substantially grow the portfolio over the next five years”.
He said: “By partnering with a broader spectrum of like-minded investors and diversifying into new property sectors, such as offices and last-mile logistics, we will further build on the success we’ve already achieved in residential markets in the past 18 months.
“Future investments will largely be concentrated in mixed-use urban locations, as the blurring of boundaries between real estate asset classes accelerates.”
The move mirrors a similar shift by another retail-focused property fund manager Meyer Bergman, which in 2018 branched out into logistics.
Redevco has been selling real estate over the past decade that “no longer matched its strategic investment view”, often involving smaller assets. The number of assets owned has dropped by 23% over the past three years, while its AUM has risen from €7.3bn to €7.5bn.
The company has also rebalancing its porfolio, reducing its historically high exposure to fashion retail. Around three quarters of acquisitions in the past five years have been in other retail segments and today less than 50% of the rental roll is in fashion retail, with 16% in urban leisure segments like theatres, cinemas, and food and beverage.
“We have taken huge strides in restructuring our core retail portfolio in the past few years, while maintaining a very healthy level of returns for our investors,” said Vaughan.
“Future-proofing also means improving the sustainability of our assets. Towards the end of last year, we committed to making our entire portfolio net-zero carbon by 2040.
“Through four signature projects related to a retail transformation scheme, a residential development, an inner-city shopping centre refurbishment and on-site renewable energy generation innovations, we are stepping up our part in the fight against global warming.”