Ciloger eyes more deals in Germany

French fund management group Ciloger is closing in on another retail property acquisition in Germany following the purchase at end-December of a portfolio of 10 shopping centres for EUR 218 mln. In an interview with PropertyEU, CEO Laurent Flechet said the operation is expected to be completed by February 2011.

'We believe that geographic diversification is an important investment criteria for us and for our clients,' Laurent Flechet said. 'Therefore, we have decided to look for opportunities in the Eurozone, because the Euro-countries allow us to avoid currency risks. In particular, we are now focusing on France and Germany, because these are Europe's largest and strongest economies.'

The December acquisition was Ciloger's second in Germany after the purchase in 2009 of a shopping centre in Jena for around EUR 8 mln on behalf of the Actipierre Europe fund for retail investors. The most recent purchase was carried out through Ciloger's partnership with Invesco Real Estate. The seller was an unnamed private investor.

The deal was earmarked for the Scpi Placement Ciloger 3 fund representing a partnership of seven institutional investors, including four life insurance groups, three pension funds, and a mutual insurance company. 'The partnership with Invesco allows us to gain access to other markets where it would be difficult for us to be active,' Flechet added. 'While they identify the investment, we search for the necessary equity and put together the fund.' Invesco RE is taking over the management of the assets.

Currently, the German market represents around 10% of Ciloger's investment portfolio but this exposure may increase significantly in the future. Flechet: 'We do not want to set a target, because it will mostly depend on opportunities arising in the next months, but in general we are trying to strengthen our presence in Germany.'

Ciloger has spent over EUR 900 mln in real estate assets in 2010, up from around EUR 650 mln in 2009. 'We have not set objectives for 2011 because our capital expenditures will depend on the opportunities in the market,' he explained. 'Before the financial crisis we tended to focus on retail properties as we believed the office sector to be overpriced. Today, prices for offices have come down and therefore we will be looking for High-Quality Environmental (HQE) and BREEAM certified office buildings while also buying into retail.'

Created in 1984, Ciloger manages 24 OPCI and SCPI investment vehicles marketed through the networks of Caisses D'Epargne and Le Groupe La Banque Postale. Its assets under management amount to roughly EUR 2.6 bn.