Morley Fund Management and Germany’s SachsenFonds Asset Management have kicked off their investment drive for their joint German Retail Investment Fund (GRIP).
The partners have paid €53m (£42m) for six properties in Lower Saxony, Rhineland-Pfalz and Baden Wuerttemberg. The properties will be placed into the fund, which is targeting a gross asset value of up to €400m (£317m). They were purchased from private sellers.
So far, the fund has total equity commitments of €61m (£48m) from four seed investors. It is aiming to raise €120m (£95.4m) of equity overall and its gearing level is not expected to exceed 60%.
Robert Wood, GRIP fund manager, said: ‘We expect German consumer and retail spending to grow in the medium term and these retail schemes should allow the GRIP Fund to flourish in those market conditions.’
‘GRIP has a strong and effective management team with a clear partnership track record. SachsenFonds has an intimate knowledge of the German market, which allows us to quickly identify and move on opportunities as they arise.’
‘The Fund has been defensively positioned with the majority of centres hosting discount retail stores that are well placed to weather any changes in market conditions and cater to the cost conscious German consumer. Yields are attractive averaging 7.00% and above, and we believe that the relatively low rents offer scope for growth in the longer term.’