Scottish Widows Investment Partnership has made its German debut with the purchase of the City-Point shopping centre in Braunschweig, northern Germany, from DIFA for €60m (£41.5m)
The 149,350 sq ft (13,875 sq m) centre is fully let over five levels with 45 shops focusing on fashion and electronics and a restaurant area.
SWIP forecasts average total returns of more than 8% a year in the German shopping centre market over the next five years. German retail sales had a stronger start to 2006 than in 2005 with retail sales in January growing by almost 2%.
Consumer confidence has led to further improvements in the quarter and is now above the 10-year average.
‘City-Point is SWIP's first strategic property purchase in Germany and is a valuable asset for our European real estate portfolio,' said head of property Tom Laidlaw.
‘We have a positive view on the German shopping centre sector and believe this market offers a high level of relative yield.'
The centre will continue to be managed by ECE Projektmanagement.
Cushman & Wakefield's corporate finance team advised SWIP on the acquisition; Jones Lang LaSalle advised DIFA.