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Meyer Bergman rides investor demand for European retail with record close

The London-based retail real estate investment management firm has managed a firm-record fundraising of €816 million for its third fund thanks to strong performance and high appetite for the European shopping space – in spite of the rise of e-commerce.

Despite the headwinds facing retailers in the moment, the demand from institutional investors for retail property in Europe remains high.

According to the European Association for Investment in Non-listed Real Estate Vehicles (INREV)’s Investment Intentions Survey 2018 published this week, 75 percent of respondents said they were attracted to buying shopping space, placing the property type second behind only commercial property’s mainstay favorite – offices. INREV’s survey attracted 320 responses from the investor, fund manager and advisor segments of the market.

Riding this enthusiasm this week was Meyer Bergman, the London-based retail property investment manager, which broke its own fundraising record closing on €816 million for its third fund, Meyer Bergman European Retail Partners III. The haul tops the €750 million it raised for MBREP II in July 2014.

Meyer Bergman’s 15 investors – 49 percent of which are from North America, where certain corners of the retailing spectrum are particularly embattled at the moment – have voted to continue backing the sector in Europe.

Among the investors, including pension funds and endowments, 55 percent have kept faith with Meyer Bergman too and are ‘re-upping’ – meaning they are returning after having invested in the firm’s second fund.

The firm’s performance will no doubt have had something to do with it. PERE understands, as of Q3 2017, Meyer Bergman’s first fund was generating a gross levered internal rate of return of 14.2 percent and equity multiple of 2.2x, while Partners II was generating an IRR of 19.8 percent and equity multiple of 2x – performance in excess of typical value-added strategies.

While regional shopping malls around the world have suffered by the advent and rise of e-commerce, Meyer Bergman largely focused its resources on other retail property types such as high street buildings and city center department stores.

Meijer: may add US investments to the mix

The firm already has made 11 investments for Partners III, representing around €410 million of the raised capital, in markets including Berlin, Dublin, London and Milan.

Chief executive Markus Meijer said: “There are fantastic investment opportunities in European retail real estate with the right approach and know-how.”

He added: “We’re currently looking at a number of potential acquisitions in France, Germany and the Nordic region and are aiming for the fund to be fully invested in about 12 months.”

Followers of the firm will be interested to hear it added the US as a possible further destination for the fund’s capital. To date, the firm has made three outlays in the country for separate clients.

Greenhill & Co. advised the firm on fundraising.