Retail property specialist Pradera is eyeing further growth of both its European and Asian business and is targeting an equal split between the two regions in due course in terms of assets under management, the company’s CEO David Fletcher told PropertyEU.
At end-2016, Fletcher said he was seeking to double the size of the total business to €5 bn by 2020, but that target has almost been reached after the UK-based company sealed a €900 mln deal with Ikea Centres in early March to acquire 25 prime retail parks next to Ikea stores in eight countries.
Pradera also recently spread its wings beyond Europe by forming a 50:50 joint venture with Australia’s Macquarie to provide asset management services in Asia. The joint venture already manages three shopping centres in China, valued at €650 mln. At present, Pradera has just over €4 bn of assets under management including the Chinese assets.
Fletcher conceded the firm was now already ‘well on its way’ to reaching its initial target, and said it may need to be revised. In due course, he is eyeing a 50-50 split between the European and Asian business. ‘We see a lot of potential in the Asian market. In terms of global macro-economic trends, Asia is looking like good value and we have a skill set that we have linked in with a fabulous partner in the region. We can bring a lot to the table.’
In Asia, Fletcher sees potential to grow Pradera's AUM to €1.5 bn by end-2017. ‘The assets that we are targeting in Asia tend to be larger in volume than our average assets in Europe, particularly in China. We have some deals in the pipeline that could help us grow our AUM there quite quickly.’
Local teams
Fletcher is also targeting Europe for further growth and is aiming to secure a new head of Germany to manage the 10 Ikea retail parks that Pradera now owns in the country. ‘One of our unique selling points is to have local asset management teams where we have significant assets.’
The focus remains on out-of-town shopping centres and retail parks and dominant shopping centres in good locations that provide good access and free parking, Fletcher said. 'They are resilient to ecommerce and work well with click and collect.’
Fletcher sees ‘plenty’ of opportunity in the core-plus segment where Pradera is primarily active. ‘This provides a bedrock of stable income as well as some value-added opportunities. At the other end of the spectrum in the opportunistic segment, we are also well-placed to unlock opportunities there. In Italy we have been really successful on this front with our asset management mandate on behalf of Tristan Capital.’
Pradera is also eyeing the Nordics for expansion, he said. The second phase of the Ikea deal, which completes in the late summer, gives the firm six assets in the region and Fletcher is seeking to have a regional head in place by the end of the year if not earlier. ‘That will give us a platform to grow in that region as well.’
Fletcher indicated that the company would be interested in any portfolios coming to the market.
