The international real estate investment manager Savills Investment Management (Savills IM) has launched the Europe V – Retail fund.
The Europe V- Retail fund – investing in local shopping centres, retail parks, designer outlet centres, high street and other retail assets across Europe – is targeting a total return of 10-12% annually (after costs, fees and alocal taxes including a yield of 5% plus).
The new fund has already acquired two assets in The Netherlands from pan-European retail real estate investment manager Redevco for €31m, comprising two retail premises located in Breda and Almere, let to C & A, ESPRIT and JD Sports.
Europe V – expected to deploy all initial capital imminently with a further capital raise scheduled for Q2 2018 – is the firm’s second recent European retail focused fund, following the launch of Nordic III – Retail in 2017.
Nordic III acquired four retail parks from IKEA Centres for €125m following a successful first close – its second close is expected in Q2 2018 – and will invest in high street properties, locally-dominant retail centres, warehouses and retail parks across Sweden, Denmark, Norway and Finland.
Neil Varnham, fund manager of Europe V, Savills Investment Management, said: “We anticipate the next 12 to 18 months will present some highly attractive buying opportunities in western European retail. Many European economies have followed Germany and moved into a recovery phase with rising consumer confidence generating growing levels of sales which feed through to demand and rental growth.
“To secure good returns it is essential to consider the key factors driving a locations success and failure. We will leverage our 13 office European platform, local market knowledge and extensive retail experience to source and add value to assets.”
Kiran Patel, Chief Investment Officer, Savills Investment Management, commented: “Investors must be cognizant of the risk factors facing retail but also aware that the sector currently presents opportunities for managers able to identify the right assets.
“We have identified six types of retail we believe to be resilient or primed to take advantage of changing trends including outlets/malls and retail stores or parks which combine retail with leisure and entertainment to provide consumers with an experience.”