BMO Real Estate Partners (BMO REP), the pan-European property investment firm, has acquired three prime retail properties in Milan and Copenhagen for a combined €65 mln on behalf of Best Value Europe II (BVE II), its pan-European retail property investment fund.
'These off-market acquisitions further diversify the income profile of the fund, providing it with new exposure to key cities which benefit from high levels of affluent footfall,' said Ian Kelley, fund director Europe at BMO REP.
In the centre of Milan, two prime retail assets totalling 716 m2 have been acquired in sale and leaseback transactions.
The first property is located on the pedestrianised Corso Vittorio Emanuele II, and is let to baggage and accessories brand Carpisa. The second property is located on the mile-long Corso Buenos Aires, which connects Milan’s historical centre to its business district, and is let to Yamamay, the premium Italian underwear brand.
Both assets are located in concentrated areas of footfall defined by limited retail vacancies and continued rental growth according to BMO, and benefit from a 24-years closed lease term.
Providing the fund with Danish diversification, a prominent 3,600 m2 corner property has been acquired in Copenhagen’s city centre. The ground and first floors of the four-storey property comprise retail units which are fully let to nine tenants, leveraging the asset’s frontage onto Copenhagen’s prime retail street, Strøget. The upper storeys comprise 17 residential apartments for the rental market.
'The specialised prime area of the retail market continues to outperform as the best brands consider prime located physical stores an integral part of their omni-channel offering. The outlooks for Copenhagen and Milan remain positive, leaving us confident in our ability to generate attractive long-term returns for our investors,' Kelley added.
BMO’s BVE II focuses on high quality, prime high street retail properties within top tier or dominant European cities that benefit from strong tourism, high footfall and deep international retailer markets.
The open-ended fund, which is aimed at institutional investors, has a target equity of €600 mln and €1 bn in GAV, with 11 investments to date delivering a portfolio GAV totalling over €300 mln.