Europa Capital acquires first investment for Europa Fund III

The European firm has bought the Forum Steglitz in Berlin for €70 million. The firm has acquired it from UK public listed company Hammerson.

Europa Capital has bought the Forum Steglitz shopping centre in Berlin for €70 million – the first acquisition for Europa Fund III, which closed to investors in June 2008 with €600 million of equity committed.

The pan-European real estate fund manager has bought the centre from Hammerson, the London-listed European REIT.

The centre is on Schlossstrasse, one of the two established shopping locations in Germany's capital, said Europa in a statement.  It was constructed in 1970 and refurbished by Hammerson between 2005 and 2007. Hennes & Mauritz, Quelle, Karstadt Sport, Lidl, and Esprit are longest standing tenants.

Europa Capital has agreed to pay a price representing a net initial yield of 8 percent. A German bank provided a €47 million loan, though Europa did not name it. Vacancy rates at the centre currently stand at around 17 percent of the floor space. The new owner plans to enhance the tenant mix through new lettings and engineer other value-creating initiatives.

Nic Fox, a director of Europa Capital with responsibility for acquisitions in middle Europe, said that since Europa Fund III had closed the firm had adopted a “very cautious acquisition strategy”.

It closed Europa Fund III targeting Central and Western Europe at the same time as the Emerging Europe Fund, targeting Eastern Europe. That vehicle attracted €150 million.