TIAA Henderson Real Estate has created a new European Outlet Mall Fund to replace its €1.5 bn vehicle which expired in February following a 10-year life.

TIAA Henderson Real Estate has created a new European Outlet Mall Fund to replace its €1.5 bn vehicle which expired in February following a 10-year life.

The new fund will continue with around 80% of unit holders in the original Outlet Mall Fund, and also run for 10 years, until 2024.

TIAA Henderson said additional equity of €260 mln was raised from existing investors in order to redeem those investors who wanted to exit the fund. The remaining equity will be used for capital expenditure projects across the portfolio. An additional €100 mln is waiting to be committed.

TIAA Henderson will be the investment manager of the fund which will continue its partnership with McArthurGlen. The outlet operator manages all the assets across the existing portfolio, including leasing, marketing, development and day-to-day management.

Investors comprise a range of pan-European institutional clients, including both McArthurGlen and TIAA Henderson Real Estate themselves.

The fund owns eight outlet mall assets across Europe, in addition to its indirect holding in three UK outlet mall assets via its investment into TIAA Real Estate's UK Outlet Mall Partnership.

Andrew Rich, fund manager at TIAA Henderson Real Estate, said: 'The Outlet Mall Fund, which was brought to the market in 2004, did not provide an option for an extension. We worked collaboratively with our investors to explore all possible routes, before determining that a restructure was the optimum outcome. It allowed redeeming investors to exit while creating a new vehicle for the majority of the investors who remained committed to the investment strategy. By initiating an open and transparent voting process, we were able to provide a solution that met the needs of all invested parties.’

Rich said the Outlet Mall Fund had an outstanding track record, having delivered around 12% IRR per annum to investors since its inception in 2004. ‘I’m confident that the new Fund will continue to provide a strong investment for our clients. We continue to explore development opportunities with McArthurGlen across the existing portfolio and will also be seeking new investment opportunities as we look to further strengthen the European portfolio.’

TIAA Henderson (TH Real Estate) was launched on 1 April following the merger of the European and Asian real estate businesses of US financial services group TIAA-CREF and UK-based fund manager Henderson Global Investors.