TH Real Estate has made the first acquisition for its recently launched European Cities Fund with the purchase of the Meraville retail park in Bologna, northern Italy, for a net initial yield of circa 5.96%.
The asset - one of Italy's top-two performing retail parks - was bought from Orion Capital Managers' €1.3 bn European Real Estate Fund IV. Although financial details were not disclosed, PropertyEU understands that the price amounted to around €100 mln.
Orion purchased the 36,000 m2 asset in late 2013 from European retail property asset manager Pradera for a price in the region of €80 mln.
Meraville Retail Park has been open since 2003 and boasts very strong sales performance, with a diverse mix of top retail tenants including Coop, Mediaworld, Leroy Merlin and top fashion retailers such as OVS, Pittarello, Alcott and Piazza Italia. The retail park has an occupancy rate of 99.7%.
The European Cities Fund was launched in March this year with €200 mln of equity.
The retail park adds to TH Real Estate’s strong presence across Italy, where its current portfolio of 11 assets totals €1.3 bn of assets under management.
'We believe that the retail warehouse market will be a sector where we will continue to see yield advantage and that Meraville specifically presents strong asset management opportunities,' said Mario Pellò, head of investment, Italy at TH Real Estate.
Liz Sworn, fund manager, Europe, TH Real Estate, commented: 'Measured against other European cities, Bologna continues to outperform in areas such as employment, growth and GDP per capita. In addition, retail sales growth in the city is predicted to average 1.4% per annum in the next five years, outperforming the Italian average. We strongly believe in the investment fundamentals of Bologna and feel that Meraville Retail Park will prove to be a strong asset for the Fund.'
