Savills Investment Management has launched a second German retail property fund focused on high street assets.

It will focus on prime locations in towns and cities across Germany, with 30% of investments in major cities and 70% in medium-sized towns.

The fund, for which Savills is aiming to raise €500m, will also consider value-added investments.

Fund manager Christian Härtl said: “Prime locations in economically strong medium-sized cities offer the same long-term stability for retail investments as major cities.”

Investors with a core/core-plus profile have focused on large cities – a highly competitive environment, he said.

“It therefore makes sense,” he added, “to broaden the investment horizon and capitalise on the opportunities available in mid-sized cities.”

A first property has been sourced in Regensburg for the fund, which will aim to return an annual 4% to investors.

Patrizia paid €320m for 25 assets in March, bought from Savills IM’s previous German Retail CSGRF fund. 

Around 75% of the 183,000sqm portfolio’s value was in Bavaria, Baden-Württemberg and Hamburg.

Patrizia bought the assets for a German occupational pension fund separate-account client.