MGPA, the Asia and Europe-focused private equity real estate firm, has completed the second investment on behalf of a separate account mandate with an unnamed North American institutional investor.
The firm announced today it had acquired the KOMM shopping centre in Offenbach, near Frankfurt, from German developer HOCHTIEF Projektenwicklung, an asset that comprises 234,000 square feet of lettable retail and office space. The deal follows MGPA’s acquisition for the account of a retail warehouse portfolio of 11 properties in March.
MGPA declined to reveal how much it paid for the KOMM shopping centre but Laurent Luccioni, the firm’s chief executive officer for Europe told PERE that the account was expected to make equity investments typically of between $20 million to $50 million per deal and that further investments for the North American investor were expected.
He said: “This is money that is looking at opportunities to acquire good assets in Europe with a view to manufacturing core properties. It could be in the core-plus or value-added range and assets, once stabilised, could be kept at (the North American investor’s) discretion for the long term or could be sold depending on what is happening in the market.”
As such, MGPA can generate a return of between 10 percent and 15 percent for the account depending on asset and market circumstances. “The return can be flexible and is calculated on a risk-adjusted basis,” Luccioni said.
MGPA is better known for its European and Asian opportunity fund series and although the firm is making headway on raising its fourth European fund, MGPA Europe Fund IV, Luccioni predicts the firm will levitate towards something resembling a “50:50 split” between fund investing and investing on behalf of more bespoke investment products.
He said: “In terms of size, or business is still dominated by the funds but going forward the goal will be to have more of a 50:50 split between fund activity and separate accounts,” he said, “we want a balance between the two which we feel is leveraging our platform and our capabilities and also enable us to weather the cycles in the capital markets.”
Nonetheless, with regards to MGPA Europe Fund IV, he said the firm was working towards a second closing at between $250 million and $300 million during the autumn. The firm closed on $100 million for the fund last November.
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