CBRE Global Investors is considering launching a new €1 bn shopping centre investment strategy to combine exposure to Europe's core markets with Southern Europe and CEE.

CBRE Global Investors is considering launching a new €1 bn shopping centre investment strategy to combine exposure to Europe's core markets with Southern Europe and CEE.

Speaking to PropertyEU during the MIPIM trade fair in Cannes, Florencio Beccar, head of CBREGI's retail strategies, said it would be a follow-on vehicle from its first European shopping centre fund and will seek to raise €500 mln of equity, versus the €380 mln raised by Fund I.

'We expect to see some investors in Fund I participate in this strategy', Beccar said. Compared to Fund I which was largely invested by European institutional capital, this strategy is expected to include a couple of US and Asian players among its cornerstone investors. 'Europe has become a much more attractive investment destination for these parties. We expect to see strong appetite for these types of returns.'

Similarly to Fund I, the new initiative will look for core-dominant shopping centres offering an opportunity to extend and re-gear leases near expiry to enhance rental income before selling the assets to core buyers. As such, it will make use of the retail asset management skills of CBREGI, which already manages over 100 malls across the continent.

Interestingly, a major difference from Fund I will be a broader focus to include Southern Europe. 'We would like to invest up to 40% of the fund in Italy, Spain, Poland and the Czech Republic,' noted Beccar. 'The fundraising environment has changed dramatically for Southern Europe since the summer of 2013. We are starting to see the first core buyers in these markets.'

The fund will seek net returns of 11-13% and with leverage of 50% it will have a war chest of €1 bn. The first closing is expected for after the summer.

CBREGI's Fund I completed five acquisitions in Sweden, Belgium, France, Germany and Poland, and is currently in due diligence on its last two purchases.

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Debt is the subject for the final MIPIM 2014 investment briefing on Thursday 13 March. The roundtable event is focused on European real estate debt and financing. The panellists are CBRE's Philip Cooper; Peter Lilja, Situs Nordic Services, Denmark; Raphael Brault, AEW Europe, France; Anthony Shayle, Head of Global Real Estate – UK Debt, UBS Global Asset Management and Adolfo Ramírez-Escudero, President CBRE Spain. The roundtable is hosted by CBRE at the CBRE Apartment, No 2 La Croisette Cannes from 10.30-11.30. More information

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