New Henderson fund targets Austria

Henderson Global Investors, on behalf of its German business Warburg-Henderson, has begun marketing its special property fund, Warburg-Henderson Österreich Fonds Nr. 2. The fund is aimed at institutional investors in Germany, Austria and Switzerland and will invest in office and commercial property in Austria.

It aims to achieve an annual total return on capital of 7%. The investment focus is on core to core-plus retail properties across Austria as well as office properties, specifically in Vienna. The fund plans to acquire between 10-15 assets. Once geared, it aims to raise up to EUR 300 mln in capital.

Eitel Coridaß, managing director at Warburg-Henderson, who will be responsible for the portfolio management, said: 'The Austrian real estate market is ideally suited for investors who want to diversify away from existing investments in Germany. Like Germany, the robust letting market - a result of the strong economy - demonstrates stability. But in addition, the proximity and close links with central Europe offer further growth drivers.'

German tax-exempt insurance investors in the fund will benefit from recent changes in Austrian fiscal legislation, under which they will no longer be required to pay taxes on their income from Austrian and German property investments. In the past, capital investment companies had to automatically retain 25% of withholding tax on rental income and profit from increases in property value for such investors.

The fund's predecessor - Warburg-Henderson Österreich Fonds Nr. 1 - currently comprises capital of around EUR 250 mln. Since its launch in December 2002, the fund has achieved a total return rate of 6% per year (IRR) for its investors. The fund is now in its disinvestment phase, having already sold several office buildings in Vienna. The portfolio currently contains 11 properties which are located in Vienna, Steyr, Parndorf, Wiener Neustadt, Wiener Neudorf, Leoben and Telfs.