Starwood Capital Group is planning to create a $1bn (€952m) core-plus fund focused solely on retail property, according to sources that track capital raising.
The fund would mark Starwood’s debut in the core-plus fund sector and poses a fairly unique proposition to a market dominated by multi-sector offerings.
Starwood, which did not comment when approached by IPE Real Estate, is associated with higher-risk value-added and opportunistic real estate strategies – it is currently raising capital for its 11th opportunity fund.
But the company also owns Starwood Retail Partners, a shopping centre asset management platform with $6.5bn in retail assets.
Core-plus real estate funds in the US tend to invest across property-types. There are two core-plus funds that target industrial assets – Clarion Lion Industrial Trust and Prologis Targeted US Logistics Fund – but IPE Real Estate is not aware of any retail-specific vehicles.
Some public pension funds are below their retail property target allocations. Ohio Police & Fire Pension Fund and Los Angeles City Employees Retirement System both made commitments to retail-only funds last year, to fill holes in their real estate portfolios.
Starwood is planning to have a first close for the fund in June, according to industry sources.