Deutsche Investment KVG has announced the launch of a food retail property fund targeting a volume of €300 mln.
Named Deutsche Investment – Food Retail I, the vehicle is structured as an open-ended real estate special AIF and is Deutsche Investment’s first retail property fund after having established five residential and one office property investment vehicles.
The fund will focus on sustainable and forward-looking grocery retail locations, with a targeted net cash-on-cash yield on the top fund level of 5.25% - 5.50% per annum.
At this time, the fund is in its sales phase and has already received backing from its first investors.
Deutsche Investment – Food Retail I will seek to build up a diversified retail property portfolio with focus on food markets (discounters and full-line grocers) and grocery-anchored retail parks in structurally stable regions of Germany. The focus is on towns of more than 3,000 residents with a bright outlook.
The first investment property acquired for the fund’s portfolio is a hypermarket in Neuenkirchen-Vörden, a town in Lower Saxony, anchored by a high-net-worth tenant, Bünting Group. The next acquisitions have progressed to an advanced stage, and are expected to be notarised in May, the company said in a statement.
‘Due to its long-term leases with high net worth tenants and its stable rental yields, food retailing represents an attractive and sustainable investment product for institutional investors. Especially in the current crisis situation, it becomes readily apparent that resupplying the population via the in-store food retailing segment plays a key role in Germany, and that this segment is clearly more resilient against the online competition than other retail segments,’ said Susanne Klaussner, managing director of DIR Deutsche Investment Retail.
‘In addition to the favourable parameters of its market segment for investors, the new fund is made particularly attractive by the market access of Deutsche Investment,’ added Enver Büyükarslan, partner of Deutsche Investment KVG. ‘Our shareholder structure allows us to acquire strategy-compliant assets for the fund any time. This way, investors can buy into the fund on short notice and without having to wait long until their funds are called.’
The fund specifies a minimum subscription amount of €10 mln and aims for a gearing ratio (LtV) of around 45%.
The transaction, asset and property management is to be handled by DIR Deutsche Investment Retail.