Henderson Global Investors has launched the German Retail Income Fund (GRIF), a specialist property fund aimed at German institutional investors. The fund will focus exclusively on German retail parks and self-service department stores. Investment criteria is for core property, serving large catchment areas, having been recently renovated and let to tenants of high financial standing.
Henderson Global Investors has launched the German Retail Income Fund (GRIF), a specialist property fund aimed at German institutional investors. The fund will focus exclusively on German retail parks and self-service department stores. Investment criteria is for core property, serving large catchment areas, having been recently renovated and let to tenants of high financial standing.
The fund's target volume for the first closing is EUR 200 mln to EUR 300 mln, which includes 50% gearing. Its target income return on investment is a minimum of 6% per annum.
Thilo Wagner, manager of the fund, said: 'German retail parks offer attractive initial yields compared both to those in other countries and to other commercial sectors in Germany. Investors in the sector benefit from stable and high cash flows which in turn allow attractive payouts.
'German retail warehousing should satisfy bargain hunters looking for short term ‘cyclical style’ appreciation, as well as those investors seeking longer term stability of performance.
'This fund will give German institutional investors direct access to prime assets while simultaneously profiting from our expertise.'
Net initial yields of German prime retail parks were at 5.5 to 6.25% at the height of the boom. They are now at 6.75% to 7.50%. Henderson's research department expects retail warehouses on the whole to perform better than offices or shopping centres in the next five years.
Stefan Wundrak, researcher at Henderson, says: 'Investors that fear they have missed the boat in the UK should now invest in good quality retail parks and profit from cyclical recovery, elsewhere in Europe. Once the current economic crisis has abated, the sector should prove increasingly attractive to shoppers and retailers alike.'
GRIF is being launched as a specialist property fund in accordance with the German Investment Act. The launch of the fund is supported by Service KAG IntReal International Real Estate, a wholly owned subsidiary of Henderson's German joint venture - Warburg - Henderson. It also provides fund administration.
