Cordea Savills acquires first asset for European Fund

International property fund manager Cordea Savills said on Tuesday that it has completed the first acquisition for its European Commercial Fund. The fund, which invests in commercial assets across the major economies of Western Europe, has purchased a retail warehouse in Vaxjo, Sweden, for EUR 30 mln. The 22,894 m² retail warehouse park was acquired from Schaumann Development and KAEC Holding, and is fully let on 10-year leases to a range of tenants including DIY store K-Rauta, electronics retailer Media Markt and Jula.

‘The fund combines low investment and property-specific risk with security of income through diversification at country, sector and property-type levels. Its straightforward, regulated structure also offers tax efficiency and a high degree of liquidity for investors,’ said Nick Hayward, director of Institutional Business at Cordea Savills. ‘While the credit crunch and weakening global outlook poses risks to economic growth in many countries, the correction seen in commercial property prices in the UK and the current easing of prices elsewhere in Europe has created the potential to build a new portfolio of quality properties at attractive prices.’

The fund, which was launched in late 2007 as an open-ended Luxembourg FCP, had its first closing in February this year with two German institutions as lead investors. The fund will have a size of EUR 500mln and target leverage of 50%. The fund invests in France, Italy, the Netherlands, Spain, the Nordic countries, the UK and Germany, and is targeting a distribution yield of 5% per annum and a total return of 7% per annum, after fees and local taxes