German fund manager Warburg-HIH Invest Real Estate plans to raise equity of €250 mln each for two new retail real estate funds for institutional investors.
The Warburg-HIH Perspektive Einzelhandel Deutschland open-ended fund will invest in retail properties in fast-growing locations in German, while the second fund, Warburg-HIH Perspektive Einzelhandel Deutschland will target high-street commercial properties or retail warehouses and local convenience centres.
The funds are targeting individual investment volumes of €400 to 450 mln, with a gearing ratio of 45% based on the fair market value of the real estate assets being acquired.
Both investment funds will have a lifetime of 15 years; the return target for the fund focusing on commercial buildings is an annual distribution of 4%, whereas the distribution yield of the retail warehouse park fund is expected to be 5% per annum.
'Retail properties should be an integral component of any diversified portfolio,' said Alexander Eggert, managing director of Warburg-HIH Invest and in charge of the product, company and fund management division. 'Germany remains an attractive market because of its sheer size and its robust economic situation. International brands are keenly interested in maintaining a footprint in the EU's largest retail market.'
