Pradera to launch EUR 600m European retail fund

Retail specialist Pradera Europe plans to launch its third European retail fund in the second half of the year, chairman Colin Campbell told PropertyEU in an exclusive interview. The vehicle - Pradera European Retail Fund III - is targeting EUR 300 mln of fresh equity from European institutional investors. With leverage of up to 50% the fund will have a spending power of EUR 600 mln.

'We expect to carry out the first closing for the fund later this year,' Campbell said. 'The vehicle will mostly target Italy, France, Poland and the Czech Republic, which we see as offering a good combination of growth prospects and reasonable market conditions,' he added. 'In France in particular, we are looking for expansion and will consider the opening of an office in Paris when our portfolio will reach a critical size.'

Founded 10 years ago, Pradera Europe currently manages funds with around EUR 2 bn of retail assets through offices in London, Madrid, Milan, Athens, Istanbul, Warsaw and Prague. At present, it has roughly EUR 300 mln of equity available for acquisitions in Europe. Campbell: 'Because of our retail specialisation, and the low gearing in our funds, we have successfully avoided the overheated market in 2007 and 2008, and are now in good shape, with no significant legacy issues.' He continued: 'We want to take advantage of good expansion opportunities, with the caution of knowing that there are quite some tricky times ahead for the Eurozone.'

In the UK, the company has launched a new business called Pradera UK to pursue further opportunities after a decade spent focusing on Continental Europe. 'Prices have adjusted significantly in England over the past two years', he said. 'We are now in the process of raising a UK retail warehouse fund, which will have a spending power of £500 mln (EUR 597.7 mln) including debt.' Plans are to start investing in the second half. So far, the company has £200 mln worth of retail parks managed for two separate accounts in the UK.

Following the launch last year of its Pradera Open-Ended Retail Fund, Campbell said the company is also looking at shopping centres and retail parks in Continental Europe, with around EUR 250 mln of property in advanced stages of negotiations. 'We are in the process of investing the EUR 150 mln of equity raised so far', he explained. 'We have already made an acquisition in the UK - the Houndstone Retail Park in Yeovil, England - and we have another five properties that we are in the process of buying in Poland, Czech Republic and Italy.'