Valad Europe beefs up in CEE with GE Capital fund

Valad Europe has significantly expanded its Central and Eastern Europe platform by taking over the management of GE Capital Real Estate's €500 mln Polish retail property fund.

The addition of the fund's portfolio increases Valad Europe's assets under management in CEE to some €800 mln of retail, logistics and light industrial real estate.

The closed-ended fund, GE Capital Real Estate’s Polish Retail Fund, owns six shopping centres and three hypermarkets, totalling 300,000 m2, located in seven of Poland’s key cities including Warsaw, Kraków and Wroclaw. The fund's lifespan runs to somewhere between 2018 and 2021.

Valad Europe also acquired a small part of GE Capital's interest in the fund in its first major corporate transaction since becoming an independent company 18 months ago. GE remains a stakeholder in the fund alongside a number of other investors.

CEE is the third largest region for Valad Europe after the UK and the Nordics. As part of the transaction Thierry Leleu, formerly general manager Europe, GE Capital Real Estate Investment Management, and the 20-strong GE Capital Real Estate Poland team have joined Valad Europe.

Leleu has been appointed head of funds management and will join Valad Europe's executive committee. David Kirkby, Valad Europe's current head of funds management, has been appointed to the new role of chief investment officer.

Marty McCarthy, CEO of Valad Europe, said he had known Leleu for many years, having also worked at GE Capital.

McCarthy said: 'This is a good transaction for all involved - it is good to get the team. It helps us to continue to expand and I think there will be more opportunities like this over time. It is a key element of our growth strategy to acquire funds, GPs and companies which add value to our platform.'

The GE Capital Retail Fund was established in 2011 and is fully invested. McCarthy told PropertyEU that many of the assets were built 10-15 years ago in 'awesome' locations that are under-developed. 'We have the capacity to re-invest in these assets and to take them from the first to the next generation. On particular assets we will look towards a redevelopment to create a prime mall. We are looking to implement one of these redevelopments over the next 12 months and at least one more between the next 12 to 24 months. '

Valad Europe, McCarthy, had long been enthusiastic about the Polish and Czech markets while markets such as Romania and Hungary have a different risk profile. ‘Poland and the Czech Republic, albeit in Central Europe, are as western as you get. We are looking to buy more assets in Poland, and potentially in the Czech Republic’, he said. The company is also currently buying industrial assets in Germany and France, and office and industrial in the UK.

Valad Europe now manages €4.3 bn of assets in Europe, across 16 funds and mandates, comprising more than 600 assets and 5,500 tenants. Following the deal, GE Capital will have €11.5 bn assets under management.