Chinese SWF, AEW scoop €1.3b European Celsius mall portfolio

A partnership of China Investment Corporation (CIC) and asset manager AEW Europe has emerged as the winner of the 10-asset Celsius shopping centre portfolio from CBRE Global Investors for €1.3 bn.

CIC, the €500 bn Chinese sovereign wealth fund, submitted the highest bid for the portfolio of eight French and two Belgian shopping centres, effectively trumping bids by a number of European heavyweight investors.

Last month, French paper Le Figaro reported that CIC was willing to 'break the piggy bank' and bid €100 mln over the top end of the initial indication price of €1 bn to €1.2 bn because shopping centres offer a 'safe return' of around 5%.

CIC's coup represents its first big splash in the French real estate market.

In early June, PropertyEU reported that CIC was behind one of three binding offers submitted by the 5 June deadline, and CBRE Global Investors was poised to pick the preferred bidder. Other bidders included Wereldhave and Unibail-Rodamco and a partnership of Belgium's AG, Altarea-Cogedim and French insurer Predica.

Fund wind-down
CBRE Global Investors hired Morgan Stanley in January this year to sell the 221,000 m2 shopping centre portfolio owned by its Retail Property Fund France Belgium (RPFFB) as part of the fund’s termination programme.

The 10-property Celsius portfolio comprises eight malls in France which account for about half of the fund's value. They include La Vache Noire in Arcueil, Mayol in Toulon, Marques Avenue de Troyes as well as Bosquet in Pau, France.

In Belgium the fund owns a 50% interest in Wijnegem and 70% of Waasland near Antwerp, two of the country’s most successful shopping centres which are believed to be valued at a total of €600-700 mln.

French insurer AXA, which owns the other 50% of Wijnegen through a Belgian fund, is believed to be considering taking control of the remaining 50%.

Dutch family office Redevco owns approximately 30% of Waasland.

In total, the sale of the Belgian and French portfolio was expected to fetch some €1-1.2 bn, depending on the valuation of the French malls, which perform less well than the Belgian properties.

With this sale, the full wind-down of the closed-end RPFFB fund has been completed, CBRE GI said in a statement.

'This transaction is a great achievement for our platform and clearly demonstrates our strong capabilities of executing on a focused investment strategy and creating value for our clients,' said Sophie van Oosterom, Chief Investment Officer EMEA, CBRE Global Investors.

Marc Reijnen, fund manager RPFFB, CBRE Global Investors added: 'The fund has delivered an exceptional performance for the limited partners. Active asset management and asset rotation has resulted in a total return well in excess of the target IRR of 9.5% to our clients over the 12 year lifetime of the fund. In total the fund acquired and sold 26 retail assets, of which many were refurbished or extended to create additional value.'

Raphael Brault, head of Separate Accounts and Fund Management at AEW Europe said: 'The acquisition of such a high-quality portfolio is an important achievement for our platform and it enables us to significantly increase our existing €5.5 bn European retail footprint representing more than 2 million m2.'

Clifford Chance, Etude Cheuvreux and Mazars acted as advisors to AEW Europe and CIC.

Morgan Stanley acted as sole financial advisor to RPFFB. In addition, White & Case, Loyens & Loeff, PWC, Allez and Associes and Fairway acted as advisors on the transaction.