ECE launches EUR 740m shopping centre fund

German shopping centre specialist ECE has launched its first pan-European real estate fund focussing on the acquisition of existing shopping centres in Europe with value-creation potential.

The ECE European Prime Shopping Center Fund will be managed by a newly established fund management company called ECE Real Estate Partners which has raised equity of more than EUR 740 mln to date. The final closing in the summer is expected to provide equity capital of around EUR 800 mln for the fund, which corresponds to an estimated gross asset value of around EUR 2 bn once the fund is fully invested.

ECE said leading institutional investors have invested in the fund, including sovereign wealth funds, pension funds and insurers. Both the management and leasing of the centres in the fund will be handled by ECE Projektmanagement. Development projects will not be acquired.

The fund has already secured three projects: the Stern-Center in Potsdam, Linden-Center in Berlin and Galeria Kaskada in Szczecin, which will be taken over following its completion in September 2011. The fund has acquired majority stakes in all three centres for a total equity investment of EUR 160 mln. Further acquisitions are planned, mainly in Germany but also in Poland, Hungary, the Czech Republic and Austria.

Volker Kraft, managing director of ECE Real Estate Partners, said: 'We see interesting investment opportunities in the revitalisation and modernisation of shopping centres in the upcoming years, which we would like to pursue with our fund.'

Alexander Otto, CEO of ECE Projektmanagement, added: 'With the new fund we respond to the demand of the market. Many financial investors don’t have the special expertise necessary to find and upgrade suitable centers. The cooperation with the fund allows ECE to meet new investors and thus strengthens our position as European market leader.'