ECE launches debut open-ended European shopping centre fund

Retail real estate specialist ECE Real Estate Partners (ECE REP) has set up an open-ended pan-European shopping centre fund after securing equity commitments of more than €700 mln. 

According to the German investor-developer, the ECE progressive income growth fund (EPIG fund) has acquired a seed portfolio comprising dominant shopping centres in Germany, Austria, Denmark, Poland and Italy with a market value in excess of €1.6 bn.

'With our high-quality seed portfolio consisting of dominant shopping centres situated in prime locations within European growth cities, we are in an excellent position to generate attractive sustainable dividend yields for our investors long-term,' said Dr. Volker Kraft, managing director of ECE REP.

'In addition, we see future attractive opportunities arising from our continued development and positioning of our centres into omni-channel trading platforms,' Kraft added.

According to ECE REP, the EPIG fund is aimed at long-term investors seeking stable distribution yields of around 6-7% per annum. The Otto family is acting as an anchor investor. EPIG will exclusively invest in 'market-leading shopping centres benefiting from prime locations in select European cities with attractive economic fundamentals and growth forecasts'.

ECE REP said it intended to take advantage of investment opportunities arising from the ongoing 'structural changes' to the retail industry. With net initial yields ranging from 4.0% (Germany) to 6.0% (Italy), the European market for shopping centres is currently valued at historical lows when compared to government bonds and other forms of real estate such as logistics, office and residential, according to ECE data.

The six super-regional shopping centres in EPIG's seed portfolio comprise Stern-Center Potsdam (pictured), LOOM Bielefeld, Megalò Chieti, G3 Gerasdorf/Vienna, Galeria Kaskada Szczecin and Rosengårdcentret Odense.

The properties represent a total leasable area of 350,000 m2 and 750 shop units, with more than 45 million visitors annually.

The assets were owned by the ECE European prime shopping centre fund, a closed ended value-add fund that in the course of the past years invested extensively in the modernisation, expansion and value creation of the centres.

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