Warburg-Henderson, the German unit of Henderson Global Investors, has raised €130 million in equity for its second Austrian property fund, Warburg-Henderson Österreich Fonds Nr. 2. The fund, which was launched last year, is targeting €300 million in commitments and remains open to institutional investors.
The fund will invest in a diversified commercial portfolio, with a focus on core and core-plus retail properties across Austria, as well as office properties in Vienna. The fund plans to acquire between 10 and 15 assets and already has made its first purchase: a 15,420-square-foot retail warehouse in Gadnergasse, between districts 10 and 11 in the city centre of Vienna. The fund aims to achieve an annual total return on capital of seven percent.
“The Austrian real estate market is ideally suited for investors who want to diversify away from existing investments in Germany,” said Clemens Rumpler, Henderson's head of property investment for Austria, in a statement. “In addition, the proximity and close links with Central Europe offer further growth drivers.”
German tax-exempt insurance institutions have benefited from last year's decisions by the Independent Fiscal Tribunal in Vienna, which no longer require them to pay taxes on their income from Austrian and German property investments. In the past, investment companies automatically retained withholding tax of 25 percent on rental income and profit from increases in property value for such investors.
The fund’s predecessor, Warburg-Henderson Österreich Fonds Nr. 1, achieved capital commitments of around €230 million and a total annual IRR of more than 6 percent since its launch in December 2002. The fund is now in its divestment phase, having already sold several office buildings in Vienna. The fund still holds 11 properties located in Vienna, Steyr, Parndorf, Wiener Neustadt, Wiener Neudorf, Leoben and Telfs.