ECE raises €740m for Euro fund

Hamburg-based ECE group has raised most of the equity for its first ever fund with a final close expected this summer. The Government of Singapore Investment Corporation is understood to be among investors in the prime shopping centre vehicle.

ECE Projektmanagement, the German property company owned by the wealthy Otto family, has raised more than €740 million for its maiden private equity real estate-style fund.

The Hamburg-based company, which has 114 shopping centres under management with a concentration in Germany, said yesterday the ECE European Prime Shopping Center Fund would be managed by new company, ECE Real Estate Partners. It also revealed how it expected to hold a final close on as much as €800 million this summer.

ECE, which launched the European Prime Shopping Centre fund in March last year, has won commitments from Government of Singapore Investment Corporation (GIC), and a German insurance company among others, according to a source. The Otto family’s financial commitment as well as of the ECE management total around €100million in the fund.

Credit Suisse is the placement agent.

In a statement, ECE said that “globally leading institutional investors” invested in the fund, including international sovereign wealth funds, pension funds, and insurance companies. The vehicle will focus on the acquisition of existing shopping centers with “value-creation potential”. Both management and leasing of the centers will be taken over by ECE Projektmanagement.

Volker Kraft, managing director of ECE Real Estate Partners, said: “We see interesting investment opportunities in the revitalisation and modernization of shopping centres in the upcoming years, which we would like to pursue with our fund.”

Alexander Otto, chief executive officer of ECE Projektmanagement, added: “With the new fund we respond to the demand of the market. Many financial investors don’t have the special expertise necessary to find and upgrade suitable centres. The cooperation with the fund allows ECE to meet new investors and thus strengthens our position as European market leader.”

The first assets are Stern-Center Potsdam, Linden-Center Berlin as well as Galeria Kaskada in Szczecin, which will be taken over following its completion in September 2011. For a total equity investment of €160 million, the fund has acquired majority stakes in all three projects.

Further deals are expected mainly in Germany, Poland, Hungary, Czech Republic, and Austria.