Meyer Bergman reaches first close towards €500m target

The specialist European retail private equity real estate firm has so far secured €130m of commitments as it seeks to raise its second fund.

Meyer Bergman, the London-based Europe retail private equity real estate firm, has secured equity commitments of around €130 million as it goes about raising a second fund, sources say.

The company is currently targeting €500 million for Meyer Bergman European Retail Partners II – or MBERP II for short – which should give it firepower of €1 – €1.25 billion to buy assets in Europe if the fund reaches its full potential.

Those that know the company say it has managed to attract equity commitments to its second fund from two anchor limited partners that invested previously in its maiden fund, Meyer Bergman European Retail Partnership I, which it launched in 2010.

Meyer Bergman itself is co-investing around €5 million in the follow-up vehicle.

According to company literature, investors have been told how Meyer Bergman is targeting well-located, prime retail assets where value can be added. Northern Europe, taking in the UK, Germany, the Nordics, France and also Poland and Czech Republic are all target countries. However, investors have also been told Southern European markets, such as Italy, have not been ruled out by the firm if assets could be acquired from distressed sellers at attractive prices.

Its fundraise comes at a time when some experts say retail property remains the least volatile asset class on the continent in terms of rents, occupancy and asset value. While the widespread economic downturn has taken a toll on high streets, prime retail assets with a diverse and multi-sector tenant base in big cities in northern and eastern Europe have sustained a strong performance throughout the recession. The yield gap for prime retail property versus government bonds is also at a historical high, making the asset class particularly attractive to investors looking for secure income and wishing to increase their exposure to European retail real estate.

Since being established in 2005, Meyer Bergman has stuck to its formula of investing in retail property, essentially the strategy boiling down to acquiring well located shopping centres.

In an interview in 2010 with PERE, chief executive Markus Meijer said: “We like assets with high footfall. It doesn’t matter whether it needs work, but any sizeable centre needs seven million-plus footfall a year.”

The first deal it did was in April 2008 when it bought the 9,862-square-metre Aladdin Shopping Centre in Kiev. The centre enjoys high footfall being on top of a metro station with very little competition.

He added: “Some people ask us if we would invest in assets other than retail. We will focus on retail but we might want to get bigger exposure to non EU markets – they could be European or somewhere else.”
He added: “We would rather become the best retail real estate fund than to try to become another diversified real estate fund.”

When the company was contacted about its latest fundraise it declined to comment.