Morley Fund Management and SachsenFonds Asset Management have made the first investment for the German Retail Investment Property Fund (GRIP), acquiring six properties for €53 million ($82 million).
The retail assets are located in Lower Saxony, Rhineland-Pfalz and Baden Wuerttemberg. In addition, the fund is conducting due diligence on a further €83 million of acquisitions from a pipeline of properties developed by SachsenFonds.
GRIP is an extension of the relationship between Morley and SachsenFonds, who have launched a suite of funds that also includes the Aviva Central European Property Fund and the LogAxes logistics property fund. The latest retail vehicle has raised total equity commitments of €61 million from four seed investors, with a target of €120 million.
Robert Wood, fund manager, said in a statement: “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.”
He added, “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 seven percent and above, and we believe that the relatively low rents offer scope for growth in the longer term.”