Greenman sees growing interest for German retail parks

Greenman, an Irish-based asset manager focusing on retail parks across Germany, said it is witnessing growing equity commitments from institutional investors fleeing the competitive German core space and expects to spend some €70 mln of equity in new acquisitions.

'Some of the equity being allocated to us was previously targeting shopping centres and high street retail which are products that no longer offer the level of returns required by some institutional investors to meet their distribution commitments,' said Greenman's John Wilkinson, speaking to PropertyEU in an interview. 'Additionally, today the spread between the returns we offer and the risk-free interest rate is so wide that taking this extra layer of risk makes sense for these investors.'

Dublin-based Greenman has recently opened office in Berlin to better serve its investments on the ground. The company focuses on urban and suburban retail parks in German cities with a population of over 300,000 inhabitants and tier-3 cities with a population between 25,000 and 125,000 inhabitants. Typically, it looks for food-anchored product with long term rental contracts of up to 30 years.

The group which has been active in Germany since 2005, has a portfolio of around €120 mln at present which he said should reach €200 mln by year-end. Wilkinson: 'We currently have €70 mln of retail park assets under due diligence which will be bought before the end of the year.'

The group's largest client is pension fund Friends First which represents around 60% of the group's equity committed. Greenman seeks to generate cash on cash returns for its investors of 5.5% per annum with an Internal Rate of Return at exit of 8-9%.