German investment giant Union Investment and Hamburg-based Redos have launched an open-ended special alternative investment fund (AIF) focusing on German retail parks and specialist shopping centres.
Redos Einzelhandel Deutschland III will concentrate on specialist retailer-focused shopping centres with stable value and potential for economic development, according to the two firms, with a target volume of at least €1 bn.
Initial equity commitments in the hundreds of millions have already been secured from various institutional investors, with the fund open to further investor capital, Redos said.
'Investors can once again benefit from the expertise of the highly specialised real estate and fund managers redos and Union Investment with our third joint special AIF,' said Torsten C. Wesch, managing director and head of fund management at Redos.
'There is continuing interest among institutional investors in large-scale retail properties. And for good reason: retail parks and specialist retailer-focussed shopping centres offer stable long-term cash flows. In addition, there is a high level of interest in renting such properties among established retailers with good credit standing,' Wesch added, noting that food retailing in particular is still much less affected by e-commerce.
The new fund continues the series of special AIFs concentrating on specialist retailer-focused shopping centres that Redos launched together with Union Investment in mid-2014. With the launch of the new vehicle, the two partners are increasing the target volume of their joint funds to €2.8 bn.
As with the two preceding vehicles, Union Investment’s role in the cooperation is to raise the equity for the new special AIF from among its network of institutional investors and handle the administration of the fund under an AIFM mandate. Redos is responsible for key areas of fund, asset and transaction management.
An initial property with a total rental area of around 48,000 m2 and an investment volume of around €100 mln has already been secured, with further potential deals being monitored.
Redos is also reviewing pipeline acquisitions for Redos Einzelhandel Deutschland II, launched in 2017, which has to date invested €948.5 mln of a target volume of €1.2 bn.
Together, the real estate assets of the three funds managed by redos currently amount to €1.64 bn. The 83 properties under management have a total rental area of around 856,500 m2.