AEW Europe launches €400m core retail fund – exclusive

AEW Europe is aiming to corral €400 million for a new fund strategy for the Paris-based real estate investment management firm – core retail.

The firm has launched the AEW Europe City Retail Fund, which has raised €125 million of equity from two institutional investors at its first close, which will target investments in high quality retail assets located in Europe’s tier one cities.

AEW Europe will use a maximum loan-to-value ratio of 50 percent, providing the firm with a total investment capacity of up to €800 million.

“The City Retail Fund will be investing in high quality, income producing retail assets that are well located within those European city centers that we believe are most likely to benefit from the improvement in the European economy and consumer confidence, as well as strong demographic and urbanization trends,” commented Marc Langenbach, director of fund management at AEW Europe.

The firm has already secured its first acquisition for the fund in Copenhagen and has an active pipeline of further potential investments in place.

“As we continue to expand our fund management platform across Europe, we look forward to applying our core retail expertize to the development of a long term portfolio through the City Retail Fund that will generate sustainable and stable cash flows for our investors,” said Stephan Boenning, head of Germany and Central Europe for AEW Europe.

During the course of the year, AEW Europe added significantly to its retail assets under management by completing a number of acquisitions that included the St Nicholas Shopping Centre in Sutton, as well as a number of acquisitions in Germany with an opportunistic strategy.

The firm also teamed up with Chinese sovereign wealth fund, China Investment Corporation, in July to acquire 10 shopping centers in Belgium and France. The purchase price of the portfolio was not disclosed but the seller, CBRE Global Investors, valued it at over €1.3 billion.