TIAA Global Asset Management has raised $1.25bn (€1.11bn) for a real estate fund specialising in US regional shopping malls.
The company said the T-C US Super Regional Mall Fund was backed by domestic and foreign institutional investors, as well as TIAA’s general account.
APG, the Netherlands’ largest pension fund investor, has been investing in super regional malls with TIAA for several years. It was not made clear whether APG was an investor in the fund.
With leverage, the commitments give the fund $2.5bn to invest in the sector.
So-called ’super regional’ malls are defined by the International Council of Shopping Centers in the US as those with more than 800,000sqft of gross leasable area, three or more anchor tenants and a primary trade area of five to 25 miles.
“Super-regional malls have proven to be a distinctly strong and stable performer throughout multiple cycles,” said Suzan Amato, managing director of TIAA Global Asset Management.
“They have demonstrated high net-operating-income growth, low volatility compared to other property sectors, and a history of outperforming the NCREIF Property Index.”
TIAA said the fund, which has so far invested around $685m, is intended to provide investors with access to “dominant super-regional malls via ventures with top tier operators”.
“We believe that US super-regional malls present a sound long-term investment given the current lack of mall construction and the shift towards consumers seeking entertainment experiences outside the home,” said Scott Kempton, managing director and portfolio manager for the fund.
“These assets are unique, hands-on environments, often offering extensive food hall and fine dining options, as well as movie theatres and other attractions that can ultimately help drive traffic and sales.”
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