UK - Pradera UK has secured £75m (€85.6m) from a European pension fund to invest in UK retail parks and is hoping to raise a further £175m from several other investors currently undertaking due diligence.
The specialist UK retail fund manager, a subsidiary of Cadena Group, has been active in the sub-sector in recent months, having acquired £220m of retail parks for its existing open-ended fund and a separate joint venture with AEW Europe and Tristan Capital Partners.
Fund manager Neil Varnham said there was still a wealth of opportunities in the retail park space and that Pradera wanted to raise a fund with a small number of like-minded investors to capitalise on them.
Pradera has capped its equity raising target at £250m so that it can deploy capital quickly and decisively.
It may seek to raise subsequent funds using the same strategy once the capital has been deployed, but it is keen to avoid accumulating a large volume of commitments at once.
Varnham said: "We are not trying to create a mega-fund, we are trying to create something that is very targeted in the types of assets it goes for and gets money deployed rapidly and wisely.
"We are focused 100% on delivering the performance to the investors, and when we think that optimum performance has been delivered, we would, in association with the investors, agree to sell those assets."
Laure Duhot, head of group fund raising at Cadena, said this approach had always been pursued by Pradera UK, but was now particularly in-line with investors' requirements for smaller, more aligned club-style funds.
"Investors don't necessarily want to invest in a mega-fund that then takes months or years to be deployed or where the manager is forced to deploy the capital," she said.
The unnamed European pension fund that has committed to the strategy was said to have completed its due diligence, while several other pension funds based in the UK and continental Europe were still going through the process.
Pradera UK has identified UK retail parks as having the potential to outperform because retailers are under pressure to expand their businesses.
Varnham said retailers would be attracted to cheaper rents versus town centre locations, while recent constraints on shopping centre development in the UK would add further impetus to the trend.
He said the vast majority of major retailers in the UK had plans for growth in the UK, despite the uncertain economic backdrop, and that retail parks were likely to be the biggest beneficiaries.
"Retailers have got to see their sales growth volume increased," Varnham added.
Department stores John Lewis and Debenhams have already begun to expand into retail parks due to a lack of availability from new shopping centres, and other retailers are expected to follow suit.