Valad Europe has secured €200m in capital from an unnamed investor to build a €500m retail property portfolio in central Europe.
The Valad Central Europe Retail Partnership (VCERP) has already completed its first investment, buying the Galeria Butovice shopping centre in Prague, Czech Republic from ING Real Estate Finance.
VCERP will invest in value-added assets, predominantly in Poland and the Czech Republic.
Christian Bearman, Valad Europe’s head of corporate development and operations, said Poland and the Czech Republic had shown some of the strongest GDP growth in the EU in recent years.
The countries, he said, present an attractive, counter-cyclical opportunity, with well-located assets in need of strong local asset management skills.
The fund will employ leverage of 60% to 70%, sourced from a pool of lenders with whom Valad has existing relationships.
VCERP will invest in first and second-generation shopping centres, retail parks and retail outlets in both primary and secondary locations.
It will seek to acquire good quality, well located real estate, targeting both single assets, primarily in lot sizes ranging from €10m to €60m, as well as portfolios above €50m.
The 36,500sqm Galleria Butovice, built in 2005, is let to around 100 tenants, including H&M. Valad said most of the centre’s income was secured against well-established, international covenants as well as being supplemented by ”significant income” from local covenants.