DEAL IN DEPTH: CBREGI to buy €300 mln of shopping centres

CBRE Global Investors expects to invest around €300 mln in shopping centres this year, more than double the amount invested in 2012.

CBRE Global Investors' director Florencio Beccar told PropertyEU that the focus will be on malls with a good track record which are dominant in their areas. 'We also look at the rent structure: we prefer lease agreements which are due to expire shortly so that we can bring up rental value and raise our return’, Beccar pointed out.

Last week, the investment manager joined forces with the Teacher Retirement System of Texas (TRS) to acquire the Leine-Center near Hanover in Germany. The deal, totalling €117 mln, is believed to be the Texas pension fund’s first in the European retail sector.

The acquisition underscores the extent to which international money is targeting Europe, Beccar said. 'American and Asian investors are looking keenly at Europe. Despite the difficult macroeconomic environment, this is an indication that there are still opportunities in Europe’s investment market,’ he added.

The deal, which reflects a net initial yield of 6%, was made by CBREGI on behalf of a vehicle believed to be its European Shopping Centre Fund. It was the fund's first acquisition in Germany, an attractive market for the fund due to the stable consumer demand.

'This acquisition provides exposure to a country where we anticipate that economic growth will continue to be above trend,' Beccar said. 'Germany is the largest retail market in Europe in terms of sales, but it is under-retailed in terms of shopping centre gross lettable area (GLA) which contributes to high occupancy and rent sustainability.' The fund already owns properties in France, Belgium and Sweden.

The deal is in line with CBREGI's strategy of buying dominant shopping centres in cities with over 250,000 inhabitants, Beccar added. 'We are focusing on North-Western European countries where the economic situation is still healthy and consumer confidence is high.’

The vendors of Leine-Center were LaSalle Investment Management, acting on behalf of its European property fund LaSalle Euro Growth II, Adler Immobilien Investment Gruppe, Fay Projects and THI Holding.

The shopping centre is located in Laatzen, a suburb of Hanover, and was originally opened in 1973 and extended in 2011. The centre is fully let. It comprises 28,161 m2, providing space for 101 retail units that include H&M, Deichmann, Expert, DM, Adler and Douglas.

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