Protego fills debut £350m shopping centre fund basket
Co-investor EFM Asset Management to oversee initial seed portfolio of three Shrewsbury centres
Protego Real Estate Investors has set up its maiden UK shopping centre fund, aimed at UK and European institutional investors.
The £350m UK Actively Managed Shopping Centre Fund is a 10-year, closed-ended, offshore Jersey property unit trust. It has been designed to provide investors with access to a portfolio of UK shopping centres, which will be intensively managed to drive returns.
Protego has appointed EFM Asset Management, the asset management subsidiary of Boultbee, to manage the fund’s properties.
It has already raised £50m of equity for the fund, against an initial first close target of £30m. Investors were institutions from the UK and the Netherlands, and included Achmea Real Estate and Fortis Investments. Protego and EFM are co-investors.
Protego aims to raise around £80m in a second phase of fundraising, giving a total potential fund value of more than £350m after 50% debt has been added. The second and final closing of the fund is expected in early November.
The fund contains a seed portfolio of three linked shopping centres in Shrewsbury, acquired in April for £120m. The properties, which provide total retail floorspace of around 430,000 sq ft (39,948 sq m), are the Darwin and Pride Hill shopping centres and the Riverside Mall.
It is intended that the fund will only house three or four shopping centres with an average value of around £60m at any one time.
The centres will be held typically for between three and five years.
Protego, which will be the fund’s investment manager, chose EFM as a partner because of its strong track record of outperformance in the shopping centre sector, as well as its ability to provide asset and facilities management.
Hugo Llewelyn, principal at Protego, said: ‘This is not an asset-gathering fund. Once the value has been extracted, the asset will be sold.’
Charles Weeks, another principal at Protego, added: ‘The fund has been structured along a five-year term but we aim to close this as quickly as possible.
‘Taking an optimistic view, if we manage to sell the assets within a three-year period, we hope to deliver geared percentage returns somewhere in the low to mid-30s.’